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<SEC-DOCUMENT>0000825324-10-000020.txt : 20101105
<SEC-HEADER>0000825324-10-000020.hdr.sgml : 20101105
<ACCEPTANCE-DATETIME>20101105163039
ACCESSION NUMBER:		0000825324-10-000020
CONFORMED SUBMISSION TYPE:	PRE 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20101105
FILED AS OF DATE:		20101105
DATE AS OF CHANGE:		20101105

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GOOD TIMES RESTAURANTS INC
		CENTRAL INDEX KEY:			0000825324
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING PLACES [5812]
		IRS NUMBER:				841133368
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		PRE 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-18590
		FILM NUMBER:		101169145

	BUSINESS ADDRESS:	
		STREET 1:		601 CORPORATE CIRCLE
		CITY:			GOLDEN
		STATE:			CO
		ZIP:			80401
		BUSINESS PHONE:		3033841400

	MAIL ADDRESS:	
		STREET 1:		601 CORPORATE CIRCLE
		CITY:			GOLDEN
		STATE:			CO
		ZIP:			80401

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PARAMOUNT VENTURES INC
		DATE OF NAME CHANGE:	19900205
</SEC-HEADER>
<DOCUMENT>
<TYPE>PRE 14A
<SEQUENCE>1
<FILENAME>proxy21.htm
<TEXT>
<html>

<head>
<!-- Document Prepared With E-Services, LLC HTML Software-->
<!-- Copyright 2006 E-Services, LLC.-->
<!-- All rights reserved EDGAR2.com -->



<title>UNITED STATES</title>


</head>

<body lang=EN-US link=blue vlink=purple>

<div class=WordSection1>

<p class=MsoNormal align=center style='margin-top:6.6pt;text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='margin-top:6.6pt;text-align:center'><b>&nbsp;</b></p>









<p class=MsoNormal align=center style='margin-top:6.6pt;text-align:center'><b>UNITED
STATES</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>SECURITIES
AND EXCHANGE COMMISSION</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>Washington,
D.C. 20549</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>SCHEDULE
14A</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>(Rule
14a-101)</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>SCHEDULE
14A INFORMATION</b></p>

<p class=MsoNormal align=center style='text-align:center'>Proxy
Statement Pursuant to Section&nbsp;14(a) of the Securities</p>

<p class=MsoNormal align=center style='text-align:center'>Exchange
Act of 1934</p>

<p class=MsoNormal style='margin-top:6.6pt'>Filed by the Registrant [x]</p>

<p class=MsoNormal>Filed by a Party other than the Registrant [ ]</p>

<p class=MsoNormal>Check the appropriate box:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[x]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=613 valign=top style='width:460.0pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Preliminary Proxy Statement</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=613 valign=top style='width:460.0pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Confidential, for Use of the Commission Only (as permitted by
  Rule&nbsp;14a-6(e)(2))</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=613 valign=top style='width:460.0pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Definitive Proxy Statement</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=613 valign=top style='width:460.0pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Definitive Additional Materials</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=613 valign=top style='width:460.0pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Soliciting Material Pursuant to &sect;240.14a-12</p>
  </td>
 </tr>
</table>



<p class=MsoNormal align=center style='text-align:center'><b>GOOD
TIMES RESTAURANTS INC.</b></p>

<div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>

<p class=MsoNormal align=center style='text-align:center;border:none;
padding:0in'>&nbsp;(Name of Registrant as Specified In Its Charter)</p>

</div>



<div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>

<p class=MsoNormal align=center style='text-align:center;border:none;
padding:0in'>&nbsp;(Name of Person(s) Filing Proxy Statement, if other than
the Registrant)</p>

</div>

<p class=MsoNormal style='margin-top:6.6pt'>Payment of Filing Fee (Check the
appropriate box):</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=660
 style='border-collapse:collapse'>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[x]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=634 valign=top style='width:475.7pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>No fee required.</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=634 valign=top style='width:475.7pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Fee computed on table below per Exchange Act
  Rules&nbsp;14a-6(i)(4) and 0-11.</p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>(1)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Title of each class of securities to which transaction applies:</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>

  </div>
  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>(2)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Aggregate number of securities to which transaction applies:</p>
  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>

  </div>
  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
 </tr>
 <tr style='height:24.75pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:24.75pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:24.75pt'>
  <p class=MsoNormal>(3)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:24.75pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:24.75pt'>
  <p class=MsoNormal>Per unit price or other underlying value of transaction computed
  pursuant to Exchange Act Rule&nbsp;0-11 (set forth the amount on which the
  filing fee is calculated and state how it was determined):</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>

  </div>
  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>(4)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Proposed maximum aggregate value of transaction:</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>

  </div>
  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>(5)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Total fee paid:</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>

  </div>
  </td>
 </tr>
</table>





<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>












<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=660
 style='border-collapse:collapse'>
 <tr style='height:12.4pt'>
  <td width=19 colspan=2 valign=top style='width:13.9pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'><br clear=all style='page-break-before:
  always'>

  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=634 colspan=4 valign=top style='width:475.7pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal>Fee paid previously with preliminary materials:</p>
  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=19 colspan=2 style='width:13.9pt;padding:0in 0in 0in 0in;
  height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=634 colspan=4 style='width:475.7pt;padding:0in 0in 0in 0in;
  height:7.45pt'>

  </td>
 </tr>
 <tr style='height:37.1pt'>
  <td width=19 colspan=2 valign=top style='width:13.9pt;background:white;
  padding:0in 0in 0in 0in;height:37.1pt'>
  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:37.1pt'>

  </td>
  <td width=634 colspan=4 valign=top style='width:475.7pt;background:white;
  padding:0in 0in 0in 0in;height:37.1pt'>
  <p class=MsoNormal>Check box if any part of the fee is offset as provided by
  Exchange Act Rule&nbsp;0-11(a)(2) and identify the filing for which the
  offsetting fee was paid previously. Identify the previous filing by
  registration statement number, or the Form or Schedule and the date of its
  filing.</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'><br
  clear=all style='page-break-before:always'>


  </td>
  <td width=22 colspan=3 valign=top style='width:16.2pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal>(1)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Amount Previously Paid:</p>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:7.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=22 colspan=3 style='width:16.2pt;padding:0in 0in 0in 0in;
  height:7.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=423 style='width:316.95pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 colspan=3 valign=top style='width:16.2pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>

  </div>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:7.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=22 colspan=3 style='width:16.2pt;padding:0in 0in 0in 0in;
  height:7.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=423 style='width:316.95pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 colspan=3 valign=top style='width:16.2pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal>(2)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Form, Schedule or Registration Statement No.:</p>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:7.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=22 colspan=3 style='width:16.2pt;padding:0in 0in 0in 0in;
  height:7.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=423 style='width:316.95pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 colspan=3 valign=top style='width:16.2pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>

  </div>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:7.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=22 colspan=3 style='width:16.2pt;padding:0in 0in 0in 0in;
  height:7.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=423 style='width:316.95pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 colspan=3 valign=top style='width:16.2pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal>(3)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Filing Party:</p>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:7.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=22 colspan=3 style='width:16.2pt;padding:0in 0in 0in 0in;
  height:7.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=423 style='width:316.95pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 colspan=3 valign=top style='width:16.2pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>

  </div>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:7.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=22 colspan=3 style='width:16.2pt;padding:0in 0in 0in 0in;
  height:7.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=423 style='width:316.95pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 colspan=3 valign=top style='width:16.2pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal>(4)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Date Filed:</p>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:7.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=22 colspan=3 style='width:16.2pt;padding:0in 0in 0in 0in;
  height:7.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=423 style='width:316.95pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 colspan=3 valign=top style='width:16.2pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <div style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in'>

  </div>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr height=0>
  <td width=14 style='border:none'></td>
  <td width=4 style='border:none'></td>
  <td width=7 style='border:none'></td>
  <td width=10 style='border:none'></td>
  <td width=7 style='border:none'></td>
  <td width=423 style='border:none'></td>
  <td width=194 style='border:none'></td>
 </tr>
</table>

<p class=MsoNormal align=center style='margin-bottom:12.0pt;text-align:center'><i>&nbsp;</i></p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



</div>

<i><br
clear=all style='page-break-before:always'>
</i>

<div class=WordSection2>









<p class=MsoNormal align=center style='text-align:center'><b>GOOD TIMES
RESTAURANTS INC.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>601 Corporate Circle</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>Golden, Colorado
80401</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoBlockText align=center style='margin-bottom:0in;margin-bottom:.0001pt;
text-align:center'><b>NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS</b></p>

<p class=MsoBlockText align=center style='margin-bottom:0in;margin-bottom:.0001pt;
text-align:center'><b>&nbsp;</b></p>

<p class=MsoBlockText align=center style='text-align:center'><b>To Be Held November 29,
2010</b></p>

<p class=MsoNormal style='text-align:justify'>To Our Stockholders:</p>



<p class=Style25 style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
0in'>A Special Meeting of the Stockholders (the &quot;Special Meeting&quot;) of Good
Times Restaurants Inc., a Nevada corporation (the &quot;Company&quot;), will be held at our
corporate offices, which are located at 601 Corporate Circle, Golden, Colorado
80401, on Monday, November 29, 2010, beginning at 9:00 a.m. local time.&nbsp; The purposes
of the Special Meeting are:</p>



<p class=Style25 style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:35.3pt;margin-bottom:.0001pt;text-indent:-.25in'>1.&nbsp;&nbsp;&nbsp;&nbsp; To consider
and approve a $2,100,000 equity investment in the Company through the issuance
of 4,200,000 shares of the Company's common stock to Small Island Investments
Limited, a Bermuda corporation (the &quot;Investor&quot;), referred to herein as the
&quot;Investment Transaction&quot;;</p>



<p class=Style25 style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:35.3pt;margin-bottom:.0001pt;text-indent:-.25in'>2.&nbsp;&nbsp;&nbsp;&nbsp; To consider
and approve a proposal to give the Company's Board of Directors discretion to
effect a one-for-three reverse stock split of the Company's issued and
outstanding common stock following the closing of the Investment Transaction,
referred to herein as the &quot;Reverse Split&quot;; and</p>



<p class=Style25 style='margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:35.1pt;margin-bottom:.0001pt;text-indent:-.25in'>3.&nbsp;&nbsp;&nbsp;&nbsp; To transact
such other business as may properly come before the Special Meeting and any
adjournments or postponements thereof.</p>



<p class=Style25 style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
0in'>The accompanying proxy statement contains additional information about the
Special Meeting.&nbsp; Only stockholders of record at the close of business on October
27, 2010 are entitled to notice of and to vote at the Special Meeting or any
adjournment or postponement thereof.</p>



<p class=Style25 style='margin-bottom:0in;margin-bottom:.0001pt;text-indent:
0in'><b>All stockholders are cordially invited to attend the Special Meeting.&nbsp;
If you do not plan to attend the Special Meeting, please sign, date and
promptly return the enclosed proxy card in the enclosed business reply envelope
or via facsimile to the attention of Boyd E. Hoback, our President and Chief Executive
Officer, at (303) 273-0177. The delivery of a proxy will not affect your right
to vote in person if you attend the Special Meeting.</b></p>



<p class=MsoNormal style='text-align:justify'>Sincerely,</p>



<p class=MsoNormal><i><u>/s/
Susan M. Knutson</u></i></p>

<p class=MsoNormal>Susan
M. Knutson</p>

<p class=MsoNormal>Secretary
and Controller</p>

<p class=MsoNormal>November
5, 2010</p>





<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



</div>

<br
clear=all style='page-break-before:always'>


<div class=WordSection3>











<p class=MsoNormal align=center style='margin-bottom:.25in;text-align:center;
line-height:150%'><b>TABLE OF CONTENTS</b></p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=642
 style='width:481.5pt;margin-left:5.4pt;border-collapse:collapse'>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt;line-height:150%'><b>ABOUT
  THE SPECIAL MEETING</b></p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-bottom:12.0pt;text-align:right;
  line-height:150%'><b>1</b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt;line-height:150%'><b>PROPOSAL
  #1 - INVESTMENT TRANSACTION</b></p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-bottom:12.0pt;text-align:right;
  line-height:150%'><b>3</b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt;line-height:150%'><b>PROPOSAL
  #2 - REVERSE STOCK SPLIT</b></p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-bottom:12.0pt;text-align:right;
  line-height:150%'><b>11</b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt;line-height:150%'><b>INTEREST
  OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON</b></p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-bottom:12.0pt;text-align:right;
  line-height:150%'><b>14</b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt;line-height:150%'><b>SECURITY
  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</b></p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-bottom:12.0pt;text-align:right;
  line-height:150%'><b>15</b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt;line-height:150%'><b>STOCKHOLDER
  NOMINATIONS AND OTHER PROPOSALS</b></p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-bottom:12.0pt;text-align:right;
  line-height:150%'><b>16</b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt;line-height:150%'><b>OTHER
  MATTERS</b></p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-bottom:12.0pt;text-align:right;
  line-height:150%'><b>16</b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt;line-height:150%'><b>WHERE
  YOU CAN FIND MORE INFORMATION</b></p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-bottom:12.0pt;text-align:right;
  line-height:150%'><b>16</b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt'><b>APPENDIX A - SECURITIES PURCHASE
  AGREEMENT DATED OCTOBER 29, 2010 BETWEEN GOOD TIMES RESTAURANTS INC. AND SMALL
  ISLAND INVESTMENTS LIMITED</b></p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal style='margin-bottom:12.0pt'><b>APPENDIX B - FAIRNESS OPINION OF
  WOODVILLE HALL CAPITAL, LLC DATED OCTOBER 29, 2010</b></p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
</table>





<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



</div>

<br
clear=all style='page-break-before:always'>


<div class=WordSection4>











<p class=MsoNormal align=center style='text-align:center'><b>GOOD TIMES
RESTAURANTS INC.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>601 Corporate Circle</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>Golden, Colorado
80401</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>PROXY STATEMENT FOR
SPECIAL MEETING OF STOCKHOLDERS</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>To Be Held November
29, 2010</b></p>



<p class=MsoNormal style='text-align:justify'>This Proxy Statement relates to a Special
Meeting of Stockholders (the &quot;Special Meeting&quot;) of Good Times Restaurants Inc.,
a Nevada corporation (the &quot;Company&quot;).&nbsp; The Special Meeting will be held on
November 29, 2010, at 9:00 a.m. local time, at our corporate offices, which are
located at 601 Corporate Circle, Golden, Colorado 80401, or at such other time
and place to which the Special Meeting may be adjourned or postponed.&nbsp; The
enclosed proxy is solicited by our Board of Directors (the &quot;Board&quot;).&nbsp; The proxy
materials relating to the Special Meeting are first being mailed to
stockholders entitled to vote at the meeting on or about November __, 2010.</p>



<p class=MsoNormal style='text-align:justify'>The terms &quot;we,&quot; &quot;us,&quot; and &quot;our&quot; in this Proxy
Statement refer to the Company.</p>



<p class=MsoNormal style='text-align:justify'>Important Notice Regarding the Availability
of Proxy Materials for the Special Meeting of Stockholders To Be Held on
November 29, 2010:&nbsp; This Proxy Statement is also available at our website at www.goodtimesburgers.com.</p>



<p class=MsoNormal align=center style='text-align:center'><b>ABOUT THE MEETING</b></p>



<p class=MsoNormal style='text-align:justify'><b>What is the purpose of the Special Meeting?</b></p>



<p class=MsoNormal style='text-align:justify'>At the Special Meeting, the stockholders will
act upon the matters outlined in the accompanying Notice of Special Meeting and
this Proxy Statement, including (1) a proposal to approve a $2,100,000 equity
investment in the Company through the issuance of 4,200,000 shares of the
Company's common stock to Small Island Investments Limited, a Bermuda
corporation (the &quot;Investor&quot;), referred to herein as the &quot;Investment Transaction&quot;;
and (2) a proposal to give our Board discretion to effect a one-for-three reverse
stock split of the Company's common stock following the closing of the
Investment Transaction, referred to herein as the &quot;Reverse Split.&quot;</p>



<p class=MsoNormal style='text-align:justify'><b>Who is entitled to attend and vote at the
Special Meeting?</b></p>



<p class=MsoNormal style='text-align:justify'>Only stockholders of record at the close of
business on the record date of October 27, 2010, or their duly appointed
proxies, are entitled to receive notice of the Special Meeting, attend the
meeting, and vote their shares at the Special Meeting or any adjournment or
postponement of the Special Meeting.&nbsp; At the close of business on October 27,
2010, there were 3,898,559 shares of our common stock outstanding and entitled
to vote.&nbsp; Each outstanding share of our common stock is entitled to one vote.</p>



<p class=MsoNormal style='text-align:justify'><b>How do I vote?</b></p>



<p class=MsoNormal style='text-align:justify'>You may vote on matters to come before the
Special Meeting in two ways:&nbsp; (i) you can attend the Special Meeting and cast
your vote in person, or (ii) you can vote by completing, signing and dating the
enclosed proxy card and returning it to us in the enclosed business reply
envelope or via facsimile to Boyd E. Hoback, our President and Chief Executive
Officer, at (303) 273-0177.&nbsp; If you return the proxy card, you will authorize
the individuals named on the proxy card, referred to as proxy holders, to vote
your shares according to your instructions or, if you provide no instructions,
according to the recommendations of our Board.&nbsp; If your shares are held by a broker
in &quot;street name,&quot; you will receive a voting instruction form from your broker
or the broker's agent asking you how your shares should be voted.</p>



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<p class=MsoNormal style='text-align:justify'><b>What if I vote and then change my mind?</b></p>



<p class=MsoNormal style='text-align:justify'>You may revoke your proxy at any time before
the vote is taken at the Special Meeting by either (i) filing with our Corporate
Secretary a written notice of revocation, (ii) sending in another duly executed
proxy bearing a later date, or (iii) attending the meeting and casting your
vote in person.&nbsp; Your last vote will be the vote that is counted.</p>



<p class=MsoNormal style='text-align:justify'><b>How can I get more information about
attending the Special Meeting and voting in person?</b></p>



<p class=MsoNormal style='text-align:justify'>The Special Meeting will be held on Monday,
November 29, 2010, at 9:00 a.m. local time, at our corporate offices, which are
located at 601 Corporate Circle, Golden, Colorado 80401, or at such other time
and place to which the Special Meeting may be adjourned or postponed.&nbsp; For
additional details about the Special Meeting, including directions to the site
of the Special Meeting and information about how you may vote in person if you
so desire, please call or email Boyd E. Hoback, our President and Chief
Executive Officer, at (303) 384-1400 or at bhoback@gtrestaurants.com.</p>



<p class=MsoNormal style='text-align:justify'><b>What are the Board's recommendations?</b></p>



<p class=MsoNormal style='text-align:justify'>Unless you give other instructions on your
proxy card, the persons named on the proxy card will vote in accordance with
the recommendations of our Board, which are described in this Proxy Statement.&nbsp;
Our Board recommends a vote FOR the approval of the Investment Transaction and
FOR the approval of the Reverse Split.</p>



<p class=MsoNormal style='text-align:justify'>With respect to any other matter that
properly comes before the meeting, the proxy holders will vote as recommended
by our Board or, if no recommendation is given, in their own discretion.</p>



<p class=MsoNormal style='text-align:justify'><b>What constitutes a quorum?</b></p>



<p class=MsoNormal style='text-align:justify'>The presence at the Special Meeting, in
person or by proxy, of the holders of a majority of the issued and outstanding
shares of our common stock on the record date will constitute a quorum at the Special
Meeting, permitting us to conduct our business at the Special Meeting.&nbsp; Proxies
received but marked as abstentions and broker non-votes (defined below) will be
included in the calculation of the number of shares considered to be present at
the meeting for purposes of determining whether a quorum is present.&nbsp; If a
quorum is not present, the Special Meeting may be adjourned until a quorum is
obtained.</p>



<p class=MsoNormal style='text-align:justify'><b>What vote is required to approve each
proposal?</b></p>



<p class=MsoNormal style='text-align:justify'>Vote Required.&nbsp; Approval of each proposal to
be considered and voted upon at the Special Meeting will require the affirmative
vote of a majority of the votes cast by the holders of our common stock present
in person or represented by proxy at the Special Meeting (assuming we have a
quorum as described above).&nbsp; A properly executed proxy marked &quot;ABSTAIN&quot; with
respect to a proposal will not be voted for that proposal but will be counted
for purposes of whether there is a quorum at the meeting.&nbsp; Abstentions will
result in the respective proposal receiving fewer votes.</p>



<p class=MsoNormal style='text-align:justify'>Effect of Broker Non-Votes.&nbsp; If your shares
are held by your broker in &quot;street name,&quot; you will receive a voting instruction
form from your broker or the broker's agent asking you how your shares should
be voted.&nbsp; Please complete the form and return it in the envelope provided by
the broker or agent.&nbsp; No postage is necessary if mailed in the United States.&nbsp;
If you do not instruct your broker how to vote, your broker may vote your
shares at its discretion or, on some matters, may not be permitted to exercise
voting discretion.&nbsp; Votes that could have been cast on the matter in question
if the brokers have received their customers' instructions, and as to which the
broker has notified us on a proxy form in accordance with industry practice or
has otherwise advised us that it lacks voting authority, are referred to as &quot;broker
non-votes.&quot;&nbsp; Thus, if you do not give your broker or nominee specific
instructions, your shares may not be voted on those matters and will not be
counted as a vote cast in determining the number of shares necessary for
approval of those matters.&nbsp; Shares represented by such broker non-votes,
however, will be counted in determining whether there is a quorum.&nbsp;
Accordingly, broker non-votes will result in the respective proposal receiving
fewer votes.</p>

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<p class=MsoNormal style='line-height:1.0pt'><a name="_Toc92016731"></a><a
name="_Toc89839943"></a><a name="_Toc89839448">&nbsp;</a></p>







<p class=MsoNormal style='text-align:justify'><b>Can I dissent or exercise rights of
appraisal?</b></p>



<p class=MsoNormal style='text-align:justify'>Neither Nevada law nor our Articles of
Incorporation or Bylaws provide our stockholders with dissenters' or appraisal
rights in connection with the proposals to be voted on at the Special Meeting.&nbsp;
If the proposals are approved at the Special Meeting, stockholders voting
against such proposals will not be entitled to seek appraisal for their shares.</p>



<p class=MsoNormal style='text-align:justify'><b>Who pays for this proxy solicitation?</b></p>



<p class=MsoNormal style='text-align:justify'>The Company will bear the entire cost of
solicitation, including the preparation, assembly, printing and mailing of this
Proxy Statement, the proxy card, and any additional solicitation materials
furnished to the stockholders.&nbsp; In addition to solicitation by mail, proxies
may be solicited by our officers and regular employees by telephone or personal
interview.&nbsp; These individuals will not receive any compensation for their
services other than their regular salaries.&nbsp; Arrangements will also be made
with brokerage houses and other custodians and fiduciaries to forward
solicitation materials to the beneficial owners of the shares held on the
record date, and we may reimburse those persons for reasonable out-of-pocket
expenses incurred by them in so doing.</p>



<p class=MsoNormal align=center style='text-align:center'><a name="_Toc92016732"></a><a
name="_Toc89839944"></a><a name="_Toc89839449"><b>PROPOSAL #1 - </b></a><b>APPROVAL OF THE
INVESTMENT TRANSACTION</b></p>



<p class=MsoNormal style='text-align:justify'>We are seeking stockholder approval of this Proposal
#1 for the purpose of complying with Rules 5365(a) and 5365(d) of the NASDAQ
Stock Market, which require, respectively, that the Company seek stockholder
approval of the Investment Transaction because (i) it will represent 51.4
percent of the Company's outstanding common stock following the Investment
Transaction, resulting in a change of control of the Company, and (ii) the
shares of common stock to be issued to the Investor in the Investment
Transaction will be issued at a price less than the recently prevailing market
prices of such shares.</p>



<p class=MsoNormal style='text-align:justify'><b>The Parties</b></p>



<p class=MsoNormal style='text-align:justify'>The Company.&nbsp; The Company was incorporated in
the State of Nevada in 1987.&nbsp; The Company's common stock is quoted on the
NASDAQ Capital Market (symbol: GTIM).&nbsp; The Company is essentially a holding
company for its wholly owned subsidiary, Good Times Drive Thru Inc. (&quot;GTDT&quot;), a
Colorado corporation, which is engaged in the business of developing, owning,
operating and franchising hamburger-oriented drive-through restaurants under
the name Good Times Burgers &amp; Frozen Custard&trade;.&nbsp; Most of our restaurants are
located in the front-range communities of Colorado but we also have franchised
restaurants in Idaho, North Dakota and Wyoming.</p>



<p class=MsoNormal style='text-align:justify'>The Investor.&nbsp; The Investor is a Bermuda
corporation based in Boston, Massachusetts.&nbsp; The Investor is an affiliate of a
company that owns and operates three restaurant brands operating in Canada and
the United States generating approximately $75 million in annual revenues.&nbsp;
Please see the section entitled &quot;Investor Board Designees&quot; below.</p>



<p class=MsoNormal style='text-align:justify'><b>Background and Description of the Proposed
Investment Transaction</b></p>



<p class=MsoNormal style='text-align:justify'><u>General</u></p>



<p class=MsoNormal style='text-align:justify'>Our Board has determined to enter into the Securities
Purchase Agreement, dated October 29, 2010 (the &quot;Purchase Agreement&quot;), with the
Investor, after consideration of the Company's capital requirements and its strategic
alternatives over the course of the last twelve months.&nbsp; In August 2009, the
Company engaged Mastodon Ventures, Inc. as its financial advisor to seek
strategic alternatives that would maximize stockholder value.&nbsp; As described
below under the heading &quot;Evaluation of Strategic Alternatives&quot;, that process
included evaluation of the Company for possible investment by various private
equity firms and strategic investors, as well as by competitors interested in
the possible purchase or conversion of the Company's assets to another
restaurant brand.</p>



<p class=MsoNormal style='text-align:justify'>The Company's sales trends have declined
since the middle of fiscal 2008 as a result of the economic recession, shift in
consumer spending and the quick service restaurant segment competitive environment.&nbsp;
It was not until June 2010 that sales trends began to flatten out, turning
positive in August, September and October of 2010.&nbsp; Those negative sales trends
and the resulting impact on the Company's cash flow from operations
significantly limited the number of interested investors in the Company.&nbsp; During
fiscal 2009 and 2010 the Company significantly reduced its operating expenses
and entered into two separate bridge loan</p>

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<p class=MsoNormal style='text-align:justify'>transactions to improve its working capital
and remain current on its long term debt as it evaluated strategic
alternatives.</p>



<p class=MsoNormal style='text-align:justify'>While the Company remains current on its long
term debt obligations, leases and current liabilities with its vendors, it has
accrued property taxes for 2009, outstanding loans and other miscellaneous
accounts payable that are due.&nbsp; In spite of the recent sales trend improvement,
the losses from operations has put a strain on the Company's ability to meet
its ongoing liabilities, and our Board has taken into account the timing of the
proposed Investment Transaction given the Company's current and increased
working capital needs in the winter months of fiscal 2011.</p>



<p class=MsoNormal style='text-align:justify'>During fiscal 2010, the Company received two
notices of noncompliance from NASDAQ for the continued listing of its common
stock relating to failing to maintain a minimum bid price of $1.00 per share of
its common stock and falling below the requirement of net tangible
stockholders' equity of $2.5 million.&nbsp; The proposed Investment Transaction and
approval of the Reverse Split will enable the Company to regain compliance with
both of the requirements for continued listing on the NASDAQ Capital Market.</p>

<p class=MsoNormal style='text-align:justify'>Evaluation of Strategic Alternatives </p>



<p class=MsoNormal style='text-align:justify'>On August 14, 2009, our Board formed a Special
Committee comprised of directors Richard Stark, Alan Teran and Geoff Bailey to
explore and evaluate strategic alternatives aimed at enhancing stockholder
value.&nbsp; At the same time, the Company hired Mastodon Ventures, Inc. to provide
strategic advisory services and explore strategic alternatives that may further
the long-term business prospects of the Company and provide value to its stockholders.&nbsp;
Mastodon Ventures is an advisory firm based in Austin, Texas focused on mergers
and acquisitions and capital formation for emerging growth and middle-market
companies with particular expertise since 2004 on multi-unit restaurant
transactions.</p>



<p class=MsoNormal style='text-align:justify'>In October 2009, Mastodon Ventures began
contacting a relatively large number of potential investors to determine their
initial interest regarding a possible purchase of Company stock.&nbsp; Mastodon and
the Company prepared various disclosure materials on the Company and its
business for the benefit of possible investors.</p>



<p class=MsoNormal style='text-align:justify'>In December 2009 and in January 2010, the
Company discussed potential financing transactions with two potential investors
which had expressed initial interest.&nbsp; These discussions did not progress
because of the Company's negative cash flow trends.</p>



<p class=MsoNormal style='text-align:justify'>On February 1, 2010, the Company and GTDT
entered into a loan agreement with W Capital, Inc., John T. MacDonald and
Golden Bridge, LLC, pursuant to which the lenders made loans totaling $400,000 to
be used for restaurant marketing and other working capital uses of GTDT.&nbsp; The
loans bear interest at a rate of 12% per annum through August 1, 2010 and at a
rate of 14% per annum from and after August 1, 2010 until the maturity date.&nbsp;
The maturity date for payment of all principal and interest on the loans is
December 31, 2010.&nbsp; The loans are convertible into shares of our common stock
at any time prior to repayment at a conversion price of 25% less than the
average price of the common stock during the 20 days prior to conversion, but
at not less than $0.75 per share nor more than $1.08 per share.&nbsp; In addition, the
Company issued warrants to the lenders which provide that the lenders may at any
time until two years from the date of repayment or conversion of the loans
purchase up to an aggregate of 50,000 shares of our common stock at the same exercise
price.&nbsp; The loans further provided that if the loans were not repaid prior to
August 1, 2010, the Company would issue warrants to the lenders for the
purchase of 50,000 additional shares of the common stock upon the same terms.</p>

<p class=MsoNormal style='text-align:justify'>In March 2010, the Company considered a
proposal from a private equity firm to acquire all of the stock of GTDT from
the Company for cash.&nbsp; However, as a condition to the proposed sale, the buyer
required that certain controlling stockholders of the Company accept less
favorable terms than the non-controlling stockholders, which was not acceptable
to the controlling stockholders.</p>



<p class=MsoNormal style='text-align:justify'>Subsequent to March 2010, Mastodon had meetings
with more than twenty possible investors about a purchase of Company stock,
including approximately seven meetings in which Boyd Hoback, the Company's
President and Chief Executive Officer, participated.&nbsp; Mr. Hoback and Eric
Reinhard, the Chairman of our Board, also had discussions with approximately six
other possible investors which were arranged other than through Mastodon.&nbsp; As a
result of these meetings before and after March 2010, four investors submitted
proposal term sheets.&nbsp; None of the foregoing activities however resulted in a
firm offer to purchase, generally because of the Company's negative cash flow trends
affected by the adverse restaurant segment competitive environment.&nbsp; Also, the
proposed investment was considered too small by some of the potential
investors.</p>

<p class=MsoFooter align=center style='text-align:center'>4</p>



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<p class=MsoNormal style='text-align:justify'>The Company and the Investor, along with
Mastodon, began discussing potential investment terms in September 2010.&nbsp; On
October 3, 2010, the Company and the Investor entered into a non-binding term
sheet for the sale of shares of its common stock for $2 million, subject to the
execution of a definitive Securities Purchase Agreement, the completion of the
Investor's due diligence, and various other contingencies.&nbsp; A copy of the term
sheet was filed as Exhibit 10.1 to the Company's Current Report on Form 8-K
filed on October 5, 2010.</p>



<p class=MsoNormal style='text-align:justify'>On October 29, 2010, the Company entered into
the Purchase Agreement with the Investor, under which the Company has agreed to
sell, and the Investor has agreed to purchase, 4,200,000 shares of the
Company's common stock (the &quot;Shares&quot;) at a price of $0.50 per share.&nbsp; When
issued at the Closing, the Shares will represent approximately 51.4 percent of
the Company's total outstanding shares on a pro forma basis.&nbsp; As described
below, the consummation of the Investment Transaction is conditioned on
obtaining the approval of the Company's stockholders of (a) the issuance and
sale of the Shares in accordance with the requirements of the Purchase
Agreement and the rules of the NASDAQ Stock Market, and (b) the proposed
Reverse Split.</p>



<p class=MsoNormal style='text-align:justify'><b>Securities Act Matters</b></p>



<p class=MsoNormal style='text-align:justify'>The Investor has represented to the Company
that it is an accredited investor, as such term is defined in Rule 501 of
Regulation D promulgated under the Securities Act of 1933, as amended (the
&quot;Securities Act&quot;).&nbsp; The Shares have not been registered under the Securities
Act or state securities laws and may not be offered or sold in the United
States in the absence of an effective registration statement or exemption from
the applicable federal and state registration requirements.&nbsp; The Company has
relied on the exemption from the registration requirements of the Securities
Act set forth in Section 4(2) thereof and the rules and regulations promulgated
thereunder for the purposes of the transaction.&nbsp; Effective at the Closing, the
Company intends to enter into a Registration Rights Agreement with the
Investor, pursuant to which the Company will grant the Investor certain
registration rights with respect to the Shares.</p>



<p class=MsoNormal style='text-align:justify'><b>Recommendation of the Board of Directors</b></p>



<p class=MsoNormal style='text-align:justify'>After taking into account the factors
described below and other factors, our Board has unanimously approved the
issuance of the Shares and has determined that the Investment Transaction is
advisable and in the best interests of our stockholders and recommends that you
vote FOR Proposal #1.</p>



<p class=MsoNormal style='text-align:justify'>Described below are the material factors
considered by our Board in making its recommendation, including the fairness of
the price to be received by us, and our desire for additional capital to
achieve our strategic goals and generally to enhance stockholder value.&nbsp; See
generally, &quot;Board's Evaluation of the Fairness of the Terms of the Investment
Transaction&quot; and &quot;Fairness Opinion&quot; below.</p>



<p class=MsoNormal style='text-align:justify'><b>Board's Evaluation of the Fairness of the Terms
of the Investment Transaction</b></p>



<p class=MsoNormal style='text-align:justify'>In reaching its decision to approve and
proceed with the Investment Transaction, our Board carefully considered a
number of factors and consulted with the Company's senior management as well as
Mastodon Ventures, Inc.</p>



<p class=MsoNormal style='text-align:justify'>In view of the complexity and wide variety of
information and factors considered in connection with its evaluation of the
Investment Transaction, the Board did not find it practicable to and did not
quantify or otherwise assign relative or specific weights to the factors it
considered in reaching its determination.&nbsp; Instead, the material factors
considered by the Board were the following:</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The
completion of the Investment Transaction will provide additional capital to meet
current liabilities, amend an existing loan agreement, pay off other loans
coming due at December 31, 2010, and grow our business in the future.</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The
completion of the Investment Transaction, together with the Reverse Split
described below, will allow us to regain compliance for the continued listing
of our common stock on the NASDAQ Capital Market.</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The
completion of the Investment Transaction will strengthen our overall financial
position and reduce our financial risk.&nbsp; In addition, the completion of the
Investment Transaction will strengthen our investor base with the addition of a
new experienced investor which will have a significant stake in our long-term
success and will be motivated to provide support and assistance to protect and
enhance its investment.</p>

<p class=MsoFooter align=center style='text-align:center'>5</p>



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<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While
the Investment Transaction will result in a change of control of the Company, it
is anticipated that the four persons who the Investor will designate as Board
members will have experience in the restaurant sector including mergers and
acquisitions and advising comparable companies.&nbsp; Please see the section
entitled &quot;Investor Board Designees&quot; below.</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our
ability to raise funds from other sources depends on many factors, including,
among other things, the growth of our revenues, our profit margins, leverage in
our operating expenses, and the cost and availability of other forms of
third-party financing to expand our business operations.&nbsp; In the view of the
Board, many of these factors are subject to significant uncertainty.</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The
securities issued in the Investment Transaction will be shares of our common
stock rather than debt or preferred stock, which will place the Investor at the
same rank as existing stockholders and allow us to maintain a less complicated
capital structure.</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The
securities issued in the Investment Transaction will dilute the percentage
ownership of each of our existing stockholders by 51.4 percent, and the
purchase price per share of common stock issued in the Investment Transaction
will be less than the recently prevailing trading market prices of such shares.</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We
received the opinion of Woodville Hall Capital, LLC, of Middleburg, Virginia,
that the consideration to be received by us in the Investment Transaction is
fair to us from a financial point of view.&nbsp; Please see the section entitled &quot;Fairness
Opinion&quot; below.</p>



<p class=MsoNormal style='text-align:justify'><b>Fairness Opinion</b></p>



<p class=MsoNormal style='text-align:justify'>As disclosed above, a fairness opinion was
provided by Woodville Hall Capital, LLC, of Middleburg, Virginia. Woodville
Hall delivered a written opinion to the Board that, as of October 29, 2010, and
based upon and subject to the factors, assumptions, qualifications and
limitations described in the written opinion, the consideration to be received
by the Company in the Investment Transaction is fair from a financial point of
view to the Company.</p>



<p class=MsoNormal style='text-align:justify'>Below is a summary of the fairness opinion
rendered by Woodville Hall to the Board as of October 29, 2010.&nbsp; The full text
of the fairness opinion setting forth the assumptions made, procedures
followed, matters considered and limitations of the review undertaken with it
is attached hereto as Appendix B.&nbsp; </p>



<p class=MsoNormal style='text-align:justify'><b>You should read the fairness opinion in its
entirety.&nbsp; Woodville Hall provided its opinion for the information and
assistance of the Board in connection with its consideration of the Investment
Transaction.&nbsp; This opinion is not a recommendation as to how a stockholder of
the Company should vote with respect to the issuance of the Shares to the
Investor in the Investment Transaction or any other matter.</b></p>



<p class=MsoNormal style='text-align:justify'>No limitations were imposed upon Woodville
Hall with respect to the investigations made or procedures followed by
Woodville Hall in rendering its opinion.&nbsp; You should understand that the
fairness opinion is based upon market conditions as they exist as of October
29, 2010 and speaks only as to such date.&nbsp; Subsequent events could affect the
fairness of the consideration received by the Company in the Investment
Transaction from a financial point of view, including changes in industry
performance or changes in market conditions and changes to our business,
financial condition and results of operation. &nbsp;Woodville Hall has not been
requested and does not intend to update, revise or reaffirm its fairness
opinion to reflect any such changes that may occur prior to the Closing.</p>



<p class=MsoNormal style='text-align:justify'>In arriving at its opinion, Woodville Hall
among other things:</p>



<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
certain reports and information filed by the Company with the SEC;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
the Company's management presentation, dated Spring 2010;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Discussed
the business and prospects of the Company with senior operating and financial
officers as well as directors of the Company;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Discussed
the fund raising process with Robert Hersch of Mastodon&nbsp; Ventures, Inc., an
advisor to the Company;</p>

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<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
the term sheet, dated October 1, 2010, between the Company and the Investor;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
the Securities Purchase Agreement, dated October 29, 2010, between the Company
and the Investor, and related documents;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
management-prepared GTDT store performance financials for the past two years;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
draft consolidated financial results for the quarter ending September 30, 2010
and certain public filings containing prior quarterly results;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
a NASDAQ de-listing extension letter dated October 6, 2010;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
certain debt agreements;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
the Company's stock performance for the prior three months (price, volume,
percentage of outstanding shares) vs. selected other companies;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
insider share holdings;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
the fund raising process for the prior year, including the number of parties
contacted, term sheets received, and reasons that the prior potential
transactions did not proceed forward;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
the minutes of the September 30, 2010 Board meeting where the proposed common
stock investment by the Investor was discussed;</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
signed Special Committee and Board of Directors resolutions authorizing the
Investor's investment; and</p>

<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed
certain other publicly available information on the Company.</p>



<p class=MsoNormal style='text-align:justify'>Woodville Hall relied, without independent
verification, on the accuracy, completeness and fair representation of all the
financial and other information obtained by it from public sources and provided
to it by the Company and Mastodon Ventures, and its opinion is conditioned upon
such accuracy, completeness and fairness.&nbsp; In addition, Woodville Hall assumed
that the unaudited financial results provided by the Company's management
represent management's best estimates of the most probable results for the
Company for the periods presented therein.</p>



<p class=MsoNormal style='text-align:justify'>Woodville Hall was retained by the Company in
October 2010 to render an opinion as to the fairness of the Investment
Transaction.&nbsp; Under the terms of its engagement, Woodville Hall received a
fairness opinion fee of $25,000.</p>



<p class=MsoNormal style='text-align:justify'>Woodville Hall is a FINRA-registered
broker-dealer that is engaged in the valuation of businesses in connection with
securities issuances, mergers, acquisitions and divestitures, with particular
experience with restaurant company transactions.</p>



<p class=MsoNormal style='text-align:justify'><b>Summary of the Investment Transaction
Documents</b></p>



<p class=MsoNormal style='text-align:justify'>Each of the material agreements relating to
the Investment Transaction is summarized below.&nbsp; The summaries below do not purport
to be complete and are qualified in their entirety by the full text of the
related agreements, copies of which have been filed as exhibits to the
Company's Current Report on Form 8-K filed with the SEC on November 5, 2010.</p>



<p class=MsoNormal style='text-align:justify'><u>Securities Purchase Agreement</u></p>



<p class=MsoNormal style='text-align:justify'>On October 29, 2010, the Company and the
Investor entered into the Purchase Agreement under which the Company has agreed
to sell, and the Investor has agreed to purchase, 4,200,000 shares of the
Company's common stock (the &quot;Shares&quot;) at a purchase price of $0.50 per share,
or an aggregate purchase price of $2,100,000.&nbsp; Upon the closing of the
Investment Transaction (the &quot;Closing&quot;), the Investor will become the beneficial
owner of approximately 51.4 percent of the Company's outstanding common stock.&nbsp;
The Purchase Agreement contains customary representations and warranties by the
Company, which are in certain cases modified by &quot;materiality&quot; and &quot;knowledge&quot;
qualifiers.</p>

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<p class=MsoNormal style='text-align:justify'>The Purchase Agreement was subject to the
Investor's further financial, legal and other due diligence examination of the
Company, GTDT and the Investment Transaction.&nbsp; On November 1, 2010, the
Investor notified the Company in writing of its successful completion of due
diligence.</p>



<p class=MsoNormal style='text-align:justify'>The Purchase Agreement provides that the
obligation of the Investor to complete the purchase of the Shares at the
Closing is subject to certain conditions (which may be waived by the Investor),
including:</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp; that the Registration Rights
Agreement has been duly executed by the Company and delivered to the Investor;</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp; that the representations
and warranties of the Company contained in the Purchase Agreement are true and
correct in all material respects (or true and correct in all respects as to
representations and warranties which are qualified by materiality) as of the
Closing as though made on and as of such date;</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii) that the Company has
received all consents, waivers, authorizations, and approvals from third
parties necessary in connection with the Investment Transaction;</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)&nbsp; that the Company's stockholders
have approved and authorized the Investment Transaction and the reverse stock
split described below; </p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (v)&nbsp; that the Company has
received the resignations of four of its current directors, including the
current Chairman of the Board and one member of the Audit Committee, and that
the Board has taken all action necessary to fill the resulting four vacancies
with the Investor's designees effective upon the Closing; and</p>



<p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vi)&nbsp; that the Company has
adopted a new management incentive program, in a form satisfactory to the
Investor, to apply from and after the Closing, subject to the subsequent
approval of such management incentive program by our stockholders, if required.</p>



<p class=MsoNormal style='text-align:justify'>Pursuant to the Purchase Agreement, the
Company has agreed to indemnify the Investor (and certain &quot;Investor Parties&quot; as
defined in the Purchase Agreement) for all liabilities, losses, or damages as a
result of or relating to any breach of any representations, warranties,
covenants, or agreements made by the Company in the Purchase Agreement and the
Registration Rights Agreement.</p>



<p class=MsoNormal style='text-align:justify'>The Purchase Agreement may be terminated at
any time prior to the Closing only as follows:</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
by
the Investor or the Company, if the Closing has not occurred by November 30,
2010, provided that the right to terminate shall not be available to either
party whose failure to perform its obligations under the Purchase Agreement is
the primary cause of the failure of the Closing to have occurred by such date;</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
by
the Investor or the Company, if the Company's stockholders do not vote to
approve the Investment Transaction;</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
at
any time by mutual agreement of the Company and the Investor;</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
by
either the Company or the Investor, if there has been a material breach of any
representation, warranty, or covenant or obligation of the other party
contained in the Purchase Agreement, which has not been cured within 15 days
after notice thereof; or</p>



<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
by
the Company if the Company has received an alternative proposal which the Board
determines in its good faith judgment (after consultation with the Company's
outside legal counsel and independent financial advisor) to be on terms
superior in value from a financial point of view to the Company's stockholders
than the Investment Transaction and reasonably capable of being completed, in
which event the Company has agreed to pay to the Investor a termination fee in
the amount of $150,000.</p>



<p class=MsoNormal style='text-align:justify'>The Purchase Agreement provides that after
the&nbsp; Closing, for so long as the Investor holds at least 50 percent of our
outstanding common stock, (i) our Board shall consist of no more than seven
members, and (ii) the Investor will have the right to designate four members of
our Board.&nbsp; In addition, the Purchase Agreement provides that for a period of
three years following the Closing, as long as the Investor continues to own at
least 80 percent of</p>

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<p class=MsoNormal style='text-align:justify'>the Shares, the Investor will have a right of
first refusal to purchase additional securities which are offered and sold by
the Company for the purpose of maintaining its percentage interest in the
Company.</p>



<p class=MsoNormal style='text-align:justify'><u>Registration Rights Agreement</u></p>



<p class=MsoNormal style='text-align:justify'>At the Closing, the Company will execute and
deliver the Registration Rights Agreement to the Investor, pursuant to which
the Company will grant the Investor certain registration rights with respect to
resale of the Shares.&nbsp; The Company has agreed to pay all expenses associated
with the registration of the Shares, including the fees and expenses of counsel
to the Investor.&nbsp; The Company has also agreed to indemnify the Investor, and
its officers, directors, members, investors, employees and agents, successors
and assigns, and each other person, if any, who controls the Investor within
the meaning of the Securities Act, against any losses, claims, damages, or
liabilities, joint or several, to which they may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages, or liabilities arise
out of or are based upon specified violations or failures to comply with
applicable federal and state securities laws, rules and regulations.&nbsp; A copy of
the form of Registration Rights Agreement was filed as Exhibit 4.1 to the
Company's Current Report on Form 8-K filed on November 3, 2010.</p>



<p class=MsoNormal style='text-align:justify'><b>Use of Proceeds</b></p>



<p class=MsoNormal style='text-align:justify'>If this Proposal #1 is approved by our
stockholders, and the Closing of the Investment Transaction occurs, subject to
Investor approval, the net proceeds of the Investment Transaction after payment
of related fees and expenses will be used to pay off the interim working
capital loans, reduce the Company's current liabilities and provide working
capital for fiscal 2011 and beyond pursuant to its business strategy.&nbsp; The
loans to be repaid include the $400,000 of principal of loans described on page
4 hereof and an additional $185,000 of principal of loans due to Golden Bridge
LLC, an entity in which certain of our directors have an interest.&nbsp; Please see
the section entitled &quot;Interest of Certain Persons in Matters to Be Acted Upon&quot;
below.&nbsp; Accrued interest of $36,647 on such loans will be converted into 73,293
shares of our common stock following the Closing of the Investment Transaction.</p>



<p class=MsoNormal style='text-align:justify'><b>Investor Board Designees</b></p>



<p class=MsoNormal style='text-align:justify'>If this Proposal #1 is approved by our
stockholders, immediately following the Closing Richard J. Stark, Alan A. Teran,
Ron Goodson and David Grissen intend to resign as directors in order to fulfill
the closing condition set forth in the Purchase Agreement.&nbsp; In addition, Eric
W. Reinhard has agreed to resign as Chairman of our Board effective upon the
Closing to fulfill the closing condition set forth in the Purchase Agreement
but he will continue as a director of the Company following the Closing.&nbsp; The foregoing
director resignations include all of the current members of the Audit Committee
(Messrs. Grissen, Teran and Stark) and all of the current members of the
Compensation Committee (Messrs. Goodson, Stark and Teran).</p>



<p class=MsoNormal style='text-align:justify'>As set forth in the Purchase Agreement,
effective upon the Closing, the Board intends to appoint four individuals
designated by the Investor to the Board to fill such vacancies, each to serve
until the next annual meeting of stockholders.&nbsp; The new Board will then elect a
Chairman and appoint new members of the Audit Committee and the Compensation
Committee, in each case in accordance with applicable NASDAQ Listing Rules
regarding director independence and committee membership.&nbsp; The Investor has advised
us it intends to designate the following individuals as its director designees:</p>



<p class=MsoNormal style='text-align:justify'>Keith A. Radford, age 41, currently serves as
Chief Financial Officer of Terra Nova Pub Group Ltd., Elephant &amp; Castle
Group Inc. and Massachusetts Pub Group LLC (2009-Present).&nbsp; Previously Mr.
Radford served as a Director and Vice President of subsidiaries within AKER
Solutions, a leading global provider of engineering and construction services,
technology products and integrated solutions (2002-2008).&nbsp; In addition he has
over eight years of experience in public practice providing auditing, taxation
and business consulting services.&nbsp; Mr. Radford holds a Bachelor of Commerce
degree from Memorial University of Newfoundland and Labrador and is a Chartered
Accountant.</p>



<p class=MsoNormal style='text-align:justify'>John F. Morgan, age 50, currently serves as
President, Chief Executive Officer and a Director of Elephant &amp; Castle
Group Inc. and Terra Nova Pub Group Ltd. (2009-Present).&nbsp; He is President,
Chief Executive Officer and a Manager of Massachusetts Pub Group LLC (2008-Present).&nbsp;
Previously Mr. Morgan had been the President of Morgan Capital Limited, St.
John's, Newfoundland, an independent financial services firm providing taxation
and merger and acquisition support services to North American and international
clients (1994-2009).</p>

<p class=MsoFooter align=center style='text-align:center'>9</p>



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<p class=MsoNormal style='text-align:justify'>Mr. Morgan holds a Bachelor of Commerce
degree from Memorial University of Newfoundland and Labrador with a
participation in the In Depth Taxation Program and Chartered Business Valuator
Program.&nbsp; He is a Chartered Accountant.</p>



<p class=MsoNormal style='text-align:justify'>Gary J. Heller, age 43, currently serves as
Secretary and a Director of Elephant &amp; Castle Group Inc. (2007-Present),
Secretary and a Manager of Massachusetts Pub Group LLC (2008-Present), and
Executive Vice President of Terra Nova Pub Group Ltd. (2009-Present).&nbsp; Prior to
entering the restaurant industry in 2007, Mr. Heller spent 16 years as an
investment banker, including serving as a Managing Director of FTI Capital
Advisors, LLC (2002-2006) and a Director of Andersen Corporate Finance LLC.&nbsp;
Mr. Heller holds a BA in Economics from the University of Pennsylvania and an
MBA in Finance from New York University.</p>



<p class=MsoNormal style='text-align:justify'>David L. Dobbin, age 49, currently serves as
Chairman of the Board of Small Island Investments Ltd. (2010-Present).&nbsp; He also
serves as Chairman of the Boards of Terra Nova Pub Group Ltd., its subsidiaries
and affiliates (2007-Present) and Welaptega Marine Ltd. (2008-Present), a
leading supplier of offshore mooring inspection systems, companies controlled
by Mr. Dobbin through Repechage Investments Limited, an investment company
formed under the laws of Canada that holds investments in the transportation,
service, real estate and hospitality sectors (2001-Present).&nbsp; Previously, Mr.
Dobbin served in several capacities with CHC Helicopter Corporation, the
world's leading offshore helicopter services provider, and led Canadian Ocean
Resource Associates Inc., a consulting firm specializing in best practice
reviews, institutional support and public/private partnerships.&nbsp; Mr. Dobbin
holds a Bachelor of Commerce from Memorial University of Newfoundland.</p>



<p class=MsoNormal style='text-align:justify'><b>Effect of the Investment Transaction on
Existing Stockholders</b></p>



<p class=MsoNormal style='text-align:justify'>Pursuant to the Purchase Agreement, the
Investor will purchase the Shares, which will represent approximately 51.4
percent of the outstanding shares of our common stock immediately upon the
Closing.</p>



<p class=MsoNormal style='text-align:justify'>Possible Effect on Market Price of our Common
Stock.&nbsp; If stockholders of the Company approve the Investment Transaction, the
Shares will be sold to the Investor at a discount to the recently prevailing
trading market prices of our common stock.&nbsp; We are unable to predict the
potential effects of the Investment Transaction on the trading activity and
market price of our common stock.&nbsp; We are also unable to predict the effects of
the trading activity and market price of our common stock if the Investment
Transaction does not close.&nbsp; Pursuant to the Registration Rights Agreement, at
the Closing we will grant the Investor and its permitted transferees
registration rights for the resale of the Shares.&nbsp; These registration rights
would facilitate the resale of the Shares into the public market, and any
resale of the Shares would increase the number of shares of our common stock
available for public trading.&nbsp; Sales by the Investor or its permitted
transferees of a substantial number of shares of our common stock in the public
market, or the perception that such sales might occur, could have a material
adverse effect on the price of our common stock.</p>



<p class=MsoNormal style='text-align:justify'>The Investor will be a Controlling
Stockholder.&nbsp; The Company's present executive officers, directors and five
percent or greater stockholders beneficially own approximately 58 percent of
our outstanding common stock and are therefore in a position, acting together,
to influence and possibly control most matters submitted for approval by our
stockholders.&nbsp; Immediately upon the Closing of the Investment Transaction, the
Investor will beneficially own approximately 51.4 percent of our outstanding common
stock and therefore such control will continue in the hands of the Investor.</p>



<p class=MsoNormal style='text-align:justify'>The Investor will have the Right to Designate
a Majority of our Board.&nbsp; Pursuant to the Purchase Agreement, the after the
Closing and for so long as the Investor holds at least 50 percent of our
outstanding common stock, (i) our Board shall consist of not more than seven
members, and (ii) the Investor will have the right to designate four members of
our Board.&nbsp; See the section entitled &quot;Investor Board Designees&quot; above.</p>



<p class=MsoNormal style='text-align:justify'>Dilution.&nbsp; If approved, the issuance of
common stock in the Investment Transaction will result in dilution by 51.4
percent to each stockholder by reducing such stockholder's percentage ownership
of the total outstanding shares.&nbsp; If stockholders of the Company approve the
proposed issuance of the Shares to the Investor, the Shares will represent
approximately 51.4 percent of our common stock immediately following the
Closing.&nbsp; In addition, the Purchase Agreement provides that for a period of
three years following the Closing, as long as the Investor continues to own at
least 80 percent of the Shares issued to the Investor, the Investor will have a
right</p>

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<p class=MsoNormal style='text-align:justify'>of first refusal to purchase additional equity
securities which are offered and sold by the Company for the purpose of
maintaining its percentage ownership interest in the Company.&nbsp; The foregoing
purchase right applies to (i) shares of our common stock, (ii) any debt or
equity security of the Company convertible into or exchangeable for shares of
common stock, with or without consideration being paid, (iii) any option,
warrant or other right to purchase shares of common stock or securities
convertible into or exchangeable for shares of common stock or any other
security so convertible, or (iv) any debt securities having voting rights
equivalent to those of our common stock.&nbsp; However, the Investor will have no
purchase right respect to securities issued and sold by the Company in an
underwritten public offering under a then-effective registration statement
under the Securities Act (except as provided in the Registration Rights
Agreement), or any common stock issued by the Company as consideration in
connection with an acquisition, merger or strategic partnership transaction of
the Company or GTDT that has been approved by our Board after the Closing.</p>



<p class=MsoNormal style='text-align:justify'><b>Vote Required for Approval</b></p>



<p class=MsoNormal style='text-align:justify'>Approval of Proposal #1 - the shareholder
resolution authorizing the Investment Transaction - will require the
affirmative vote of a majority of the votes cast by the holders of our common stock
present in person or represented by proxy at the special meeting and entitled
to vote on the matter.</p>



<p class=MsoNormal style='text-align:justify'><b>THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE &quot;FOR&quot; PROPOSAL #1.</b></p>



<p class=MsoNormal align=center style='text-align:center'><b>PROPOSAL #2 -
APPROVAL OF REVERSE STOCK SPLIT</b></p>



<p class=MsoNormal style='text-align:justify'>The Board adopted a resolution on October 28,
2010 seeking stockholder approval to grant the Board discretionary authority to
effect a reverse split with respect to the issued and outstanding shares of the
Company's common stock.&nbsp; If this Proposal #2, as more fully described below, is
approved by the Company's stockholders, the Board may subsequently effect, in
its sole discretion, the reverse stock split based upon a one-for-three
exchange ratio.&nbsp; If approved, the Board's discretion to effect the reverse
stock split would last until December 31, 2010, when such discretion would
terminate if not exercised by the Board.</p>



<p class=MsoNormal style='text-align:justify'>Under the Purchase Agreement, stockholder
approval of this Proposal #2 is a condition to the Closing of the Investment
Transaction.</p>



<p class=MsoNormal style='text-align:justify'><b>Reasons for Effecting a Reverse Stock Split</b></p>



<p class=MsoNormal style='text-align:justify'>The Board believes that a reverse stock split
is desirable for the following reasons:</p>



<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Regain
Compliance with NASDAQ Listing Rules.&nbsp; As we have previously disclosed, on July
19, 2010, the Company received a deficiency notice from NASDAQ that the Company
had failed to maintain a minimum bid price of $1.00 per share for a period of
30 consecutive business days.&nbsp; The Company has a grace period of 180 calendar
days, or until January 18, 2011, in which to regain compliance with this NASDAQ
listing rule.&nbsp; To regain compliance, the bid price of our common stock must
close at $1.00 per share or more for a minimum of ten consecutive business days
anytime before January 18, 2011.&nbsp; The Board has concluded that, absent a
significant market-driven increase in our stock price, the best way for the
Company to increase the closing bid price of our common stock to the level
satisfactory for meeting the continued listing requirements of NASDAQ is to
effect the reverse stock split.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Increased
Share Price.&nbsp; A reverse stock split may increase the trading price of shares of
the Company's common stock, potentially making them more attractive investments
generally and to institutional investors in particular.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reduced
Number of Shares Issued and Outstanding.&nbsp; The Company has 3,898,559 shares of
its common stock issued and outstanding and will issue an additional 4,200,000
shares of common stock to the Investor at the Closing and an additional 73,293
shares of common stock upon the conversion of accrued interest on the loans
discussed on page 4 hereof.&nbsp; Thus, following the Investment Transaction, the
Company will have an aggregate of 8,171,852 shares of common stock outstanding,
not including those shares of common stock reserved for issuance under the
Company's Omnibus Equity Plan or upon exercise of outstanding warrants of the
Company. &nbsp;The Board believes that reducing the number of issued and outstanding
shares of common stock following the Investment Transaction to 2,723,951 (and
increasing the proportion of the shares of common stock authorized but
unissued) may be beneficial to the Company and its stockholders.</p>

<p class=MsoFooter align=center style='text-align:center'>11</p>



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<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify'>Such a reduction might also help to facilitate future
business combinations or other transactions in the event that such
opportunities arise.</p>

<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reduced
Stockholder Transaction Costs.&nbsp; Because investors typically pay commissions
based on the number of shares traded when they buy or sell shares of our common
stock, such investors may pay lower commissions for trading a given dollar
amount of the Company's common stock if the reverse stock split occurs.</p>



<p class=MsoNormal style='text-align:justify'><b>Potential Risks Associated with a Reverse
Stock Split</b></p>



<p class=MsoNormal style='text-align:justify'>The following is a non-exhaustive list of
potential risks associated with effecting a reverse stock split:</p>



<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No
Guarantee of Increased Share Price. There are no assurances that the trading
price of shares of the Company's common stock will increase upon the
effectiveness of any reverse stock split approved by the Board. The future
performance of our common stock will be based on the Company's performance and
other factors that are unrelated to the number of issued and outstanding shares
of our common stock. If the trading price of shares of our common stock does
not increase by an amount that is commensurate with the reduction in our shares
issued and outstanding as a result of the reverse stock split, the total market
capitalization of the Company will decrease.</p>

<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reduced
Liquidity is Possible. The liquidity of our common stock could be adversely
affected by the reduced number of shares that would be issued and outstanding
if the reverse stock split is approved.</p>



<p class=MsoNormal style='text-align:justify'><b>Effect of a Reverse Stock Split</b></p>



<p class=MsoNormal style='text-align:justify'>The principal effect of the reverse stock
split would be to reduce the number of issued and outstanding shares of the
Company's common stock from 8,171,852 shares (after the Closing of the
Investment Transaction) to 2,723,951 shares, based on a one-for-three exchange
ratio. As such, each stockholder holding three shares of the Company's common
stock (par value $0.001 per share) immediately prior to the reverse stock split
taking effect will become a holder of one share of our common stock (par value
$0.001 per share) after the reverse stock split is consummated.</p>



<p class=MsoNormal style='text-align:justify'>The reverse stock split itself will not
change the proportionate equity interests of our stockholders, nor will the
respective voting rights or other rights of stockholders be altered in any way
by the reverse stock split, other than as a result of the treatment of
fractional shares as described below.&nbsp; The common stock issued pursuant to the
reverse stock split will remain fully paid and non-assessable. The number of
authorized shares of the Company's common stock will not change by virtue of
adopting this Proposal #2.&nbsp; Therefore, after taking into account the issuance
of the Shares to the Investor in the Investment Transaction, approximately
41,828,148 shares of the Company's common stock of the 50,000,000 currently
authorized would remain available for issuance (inclusive of 857,184 shares
which are reserved for issuance pursuant to our Omnibus Equity Plan or upon
exercise of outstanding warrants).&nbsp; If this Proposal #2 is approved, there will
be approximately 47,276,049 shares of common stock available for issuance
(including 285,728 reserved shares under our Omnibus Equity Plan and our
outstanding warrants).&nbsp; The shares of authorized and unissued common stock
following the Reverse Split will be available for issuance in connection with such
corporate transactions and purposes as may, from time to time, be considered
advisable by our Board.&nbsp; Except as discussed herein, however, we have no
arrangements, agreements, understandings or plans at the current time for the
issuance or use of the additional shares of common stock that will be available
following the Reverse Split.&nbsp; Having such shares available for issuance in the
future will allow the shares to be issued as determined by our Board.</p>



<p class=MsoNormal style='text-align:justify'><b>Mechanics of Reverse Stock Split</b></p>



<p class=MsoNormal style='text-align:justify'>If this Proposal #2 is approved by
stockholders and the Board effects a reverse stock split as discussed above,
stockholders will be entitled to exchange their stock certificates after the
reverse stock split takes place. Stockholders may exchange their stock
certificates by contacting our transfer agent, Computershare Trust Company.
Otherwise, stock certificates representing pre-reverse stock split shares of
our common stock will be exchanged for certificates evidencing post-reverse
stock split shares at the first time they are presented to the transfer agent
for transfer.</p>

<p class=MsoFooter align=center style='text-align:center'>12</p>



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<p class=MsoNormal style='text-align:justify'><b>Impact on Omnibus Equity Plan, Options,
Warrants and Convertible Securities</b></p>



<p class=MsoNormal style='text-align:justify'>If the reverse stock split is approved, the
number of shares of our common stock that may be issued upon the exercise of
conversion rights held by holders of securities convertible into our common
stock will be reduced proportionately based upon the one-for-three exchange
ratio. Proportionate adjustments will also be made to the per-share exercise price
and the number of shares of our common stock issuable upon the exercise of all
outstanding options and warrants entitling the holders to purchase shares of
our common stock. Finally, the number of shares reserved for issuance under the
Company's Omnibus Equity Plan will be reduced proportionately based on the one-for-three
exchange ratio.</p>



<p class=MsoNormal style='text-align:justify'><b>Fractional Shares</b></p>



<p class=MsoNormal style='text-align:justify'>The Company will not issue fractional shares
in connection with the reverse stock split if it is effected by the Board.
Instead, any fractional share that results from the reverse stock split will be
rounded to the next whole share.</p>



<p class=MsoNormal style='text-align:justify'><b>Accounting Matters</b></p>



<p class=MsoNormal style='text-align:justify'>Because the reverse stock split will not
change the par value of shares of the Company's common stock, our stated
capital attributable to common stock on our balance sheet will be reduced to
approximately 33 percent of its present amount. Additional paid-in capital will
increase by the dollar amount by which stated capital decreases. </p>



<p class=MsoNormal style='text-align:justify'><b>Certain Federal Income Tax Consequences of a
Reverse Stock Split</b></p>



<p class=MsoNormal style='text-align:justify'>IN ACCORDANCE WITH 31 C.F.R. &sect; 10.35(B) (5),
THE DISCUSSION OF THE TAX ASPECTS PROVIDED HEREIN HAS NOT BEEN PREPARED, AND
MAY NOT BE RELIED UPON BY ANY PERSON, FOR PROTECTION AGAINST ANY FEDERAL TAX
PENALTY.&nbsp; THE TAX DISCUSSION HEREIN IS WRITTEN TO SUPPORT PROPOSAL #2 AND EACH
STOCKHOLDER SHOULD SEEK ADVICE BASED ON SUCH STOCKHOLDER'S PARTICULAR
CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.</p>



<p class=MsoNormal style='text-align:justify'>The following is a summary of certain United
States federal income tax consequences of the reverse stock split generally
applicable to beneficial holders of shares of our common stock. This summary
addresses only such stockholders who hold their pre-reverse stock split shares
as capital assets and will hold the post-reverse stock split shares as capital
assets. This discussion does not address all United States federal income tax
considerations that may be relevant to particular stockholders in light of
their individual circumstances or to stockholders that are subject to special
rules, such as financial institutions, tax-exempt organizations, insurance
companies, dealers in securities, and foreign stockholders. The following
summary is based upon the provisions of the Internal Revenue Code of 1986, as
amended, applicable Treasury Regulations thereunder, judicial decisions and
current administrative rulings, as of the date hereof, all of which are subject
to change, possibly on a retroactive basis. Tax consequences under state,
local, foreign and other laws are not addressed in this summary. Each
stockholder should consult its tax advisor as to the particular facts and
circumstances which may be unique to such stockholder and also as to any
estate, gift, state, local or foreign tax considerations arising out of the
reverse stock split. We have not and will not seek a ruling from the Internal
Revenue Service or an opinion of counsel regarding the United States federal
income tax consequences of the proposed reverse stock split.&nbsp; Therefore, the
income tax consequences discussed below are not binding on the Internal Revenue
Service and there can be no assurance that such income tax consequences, if
challenged, would be sustained.</p>



<p class=MsoNormal style='text-align:justify'>Subject to the above stated, the United
States federal income tax consequences of the proposed reverse stock split may
be summarized as follows:</p>



<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:.25in;text-align:justify;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The
reverse stock split would qualify as a tax-free recapitalization under the
Internal Revenue Code.&nbsp; Accordingly, a stockholder will not recognize any gain
or loss for United States federal income tax purposes as a result of the
receipt of the post-reverse stock split common stock pursuant to the reverse
stock split.</p>

<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The
shares of post-reverse stock split common stock in the hands of a stockholder
will have an aggregate basis for computing gain or loss on a subsequent
disposition equal to the aggregate basis of the shares of pre-reverse stock
split common stock held by the stockholder immediately prior to the reverse
stock split.</p>

<p class=MsoFooter align=center style='text-align:center'>13</p>



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<p class=MsoNormal style='margin-left:.25in;text-align:justify;text-indent:
- -.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A
stockholder's holding period for the post-reverse stock split common stock will
include the holding period of the pre-reverse stock split common stock
exchanged.</p>



<p class=MsoNormal style='text-align:justify'><b>No Appraisal Rights</b></p>



<p class=MsoNormal style='text-align:justify'>Neither Nevada law nor our Articles of
Incorporation or Bylaws provide our stockholders with dissenters' or appraisal
rights in connection with the proposal described above. If the proposal to give
our Board discretion to effect a reverse stock split with respect to issued and
outstanding shares of the Company's common stock is approved at the Special
Meeting, stockholders voting against such proposals will not be entitled to
seek appraisal for their shares.</p>



<p class=MsoNormal style='text-align:justify'><b>Vote Required for Approval</b></p>



<p class=MsoNormal style='text-align:justify'>Approval of Proposal #2 - the shareholder
resolution authorizing the Reverse Stock Split - will require the affirmative
vote of a majority of the votes cast by the holders of our common stock present
in person or represented by proxy at the special meeting and entitled to vote
on the matter.</p>



<p class=MsoNormal style='text-align:justify'><b>THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE &quot;FOR&quot; PROPOSAL #2.&nbsp; IF THE STOCKHOLDERS DO NOT APPROVE
THE REVERSE SPLIT, THE INVESTMENT TRANSACTION WILL NOT OCCUR.</b></p>



<p class=MsoNormal align=center style='text-align:center'><b>INTEREST OF CERTAIN
PERSONS IN MATTERS TO BE ACTED UPON</b></p>



<p class=MsoNormal style='text-align:justify'>On April 22, 2009, the Company entered into a
loan agreement with Golden Bridge, LLC (&quot;Golden Bridge&quot;), pursuant to
which Golden Bridge made a loan of $185,000 to the Company.&nbsp; Eric W. Reinhard, Ron
Goodson, David Grissen, Richard J. Stark and Alan A. Teran, who are all members
of our Board and stockholders of the Company, are the sole members of Golden
Bridge.&nbsp; Mr. Reinhard is the sole manager of Golden Bridge.&nbsp; The Golden Bridge
loan was due and payable in full on July 10, 2010, but we have a letter
agreement with Golden Bridge to continue with interest only payments until we
complete a larger recapitalization event or until December 31, 2010.&nbsp;
Accordingly, $185,000 of the net proceeds from the sale and issuance of the
Shares to the Investor in the Investment Transaction will be used to repay the
Golden Bridge loan.&nbsp; As the members of Golden Bridge, Messrs. Reinhard,
Goodson, Grissen, Stark and Teran therefore have an indirect interest in the Investment
Transaction.</p>



<p class=MsoNormal style='text-align:justify'>The Purchase Agreement requires that The
Bailey Company and Eric W. Reinhard enter into an agreement to vote in favor of
the Investment Transaction with respect to an aggregate of 2,079,192 shares of
our common stock owned by them, which represents approximately 53.3 percent of
our outstanding common stock.</p>

<p class=MsoFooter align=center style='text-align:center'>14</p>



<div class=MsoNormal align=center style='text-align:center'>

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<p class=Style27 style='text-indent:0in'><b>SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT</b></p>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
12.0pt;margin-left:0in;text-align:justify'>The following table shows the beneficial
ownership of shares of the Company's common stock as of November 1, 2010 by each
person known by the Company to be the beneficial owner of more than five
percent of the shares of the Company's common stock, each director and each named
executive officer, and all directors and executive officers as a group.&nbsp; The
address for the principal stockholders and the directors and officers is 601
Corporate Circle, Golden, CO 80401.</p>

<table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
 style='margin-left:23.4pt;border-collapse:collapse;border:none'>
 <tr style='height:1.0pt'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:1.0pt'><b><br clear=all style='page-break-before:
  always'>
  </b>
  <p class=MsoNormal><b><u>Holder</u></b></p>
  <p class=MsoNormal><b><u>Principal
  stockholders</u></b></p>
  </td>
  <td width=180 valign=top style='width:135.0pt;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'>
  <p class=MsoNormal style='margin-left:12.6pt'><b>Number of shares</b></p>
  <p class=MsoNormal style='margin-left:12.6pt'><b><u>beneficially owned</u></b></p>
  </td>
  <td width=90 valign=top style='width:67.5pt;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'>
  <p class=MsoNormal style='margin-top:0in;margin-right:.3pt;margin-bottom:
  0in;margin-left:.05in;margin-bottom:.0001pt'><b>Percent of</b></p>
  <p class=MsoNormal style='margin-top:0in;margin-right:.3pt;margin-bottom:
  0in;margin-left:12.6pt;margin-bottom:.0001pt'><b><u>class**</u></b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>The
  Bailey Company, LLLP</p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>821,512<sup>1</sup></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>21.07%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>The
  Erie County Investment Co.</p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>1,016,192<sup>1</sup></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>26.07%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Commonwealth
  Equity Services LLP</p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>312,913<sup>2</sup></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>8.03%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Paul
  T. Bailey</p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>1,074,192<sup>3</sup></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>27.55%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal><b><u>Directors
  and Officers</u></b></p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'><b>&nbsp;</b></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'><b>&nbsp;</b></p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Geoffrey
  R. Bailey, Director</p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>23,300<sup>4</sup></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>*</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Ron
  Goodson, Director</p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>214,497<sup>5</sup></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>5.48%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>David
  Grissen, Director</p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>231,999<sup>6</sup></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>5.90%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Boyd
  E. Hoback, Director, President and Chief Executive Officer</p>
  </td>
  <td width=180 valign=bottom style='width:135.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>134,542<sup>7</sup></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>3.33%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Scott
  G. LeFever, Vice President, Operations</p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>18,790<sup>8</sup></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>*</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Richard
  J. Stark, Director</p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>62,103<sup>9</sup></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>1.58%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Alan
  A. Teran, Director</p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>&nbsp;113,206<sup>10</sup></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>2.88%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Eric
  W. Reinhard, Chairman</p>
  </td>
  <td width=180 style='width:135.0pt;border-top:none;border-left:none;
  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>314,000<sup>11</sup></p>
  </td>
  <td width=90 style='width:67.5pt;border-top:none;border-left:none;border-bottom:
  solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>7.94%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=354 valign=top style='width:265.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>All
  directors and executive officers as a group</p>
  <p class=MsoNormal>(9
  persons including all those named above)</p>
  </td>
  <td width=180 valign=bottom style='width:135.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-right:35.1pt;text-align:right'>1,129,181<sup>12</sup></p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='margin-top:0in;margin-right:17.1pt;
  margin-bottom:0in;margin-left:.05in;margin-bottom:.0001pt;text-align:right'>26.38%</p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-top:12.0pt;margin-right:0in;margin-bottom:
6.0pt;margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>1&nbsp;&nbsp;&nbsp; </sup>The Bailey Company is
99% owned by The Erie County Investment Co., which should be deemed the
beneficial owner of Good Times Restaurants common stock held by The Bailey
Company.&nbsp; The Erie County Investment Co. also owns 194,680 shares of Good Times
Restaurants common stock in its own name.&nbsp; Geoffrey R. Bailey is a director and
executive officer of The Erie County Investment Co.&nbsp; Geoffrey R. Bailey disclaims
beneficial ownership of the shares of Good Times Restaurants common stock held
by The Bailey Company and The Erie County Investment Co.&nbsp; See footnote 3 below.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>2&nbsp;&nbsp;&nbsp; </sup>The information as to
Commonwealth Equity Services LLP (&quot;Commonwealth&quot;) and entities controlled
directly or indirectly by Commonwealth is derived in part from
Schedule&nbsp;13G, as filed with the Securities and Exchange Commission on
December 23, 2005 and most recently amended on February 11, 2009, and
information furnished to Good Times separately by Commonwealth.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>3&nbsp;&nbsp;&nbsp; </sup>Includes 821,512
shares beneficially owned by The Bailey Company and 194,680 shares held of
record by The Erie County Investment Co.&nbsp; Paul T. Bailey is the principal owner
of The Erie County Investment Co. and may be deemed the beneficial owner of
shares held by The Erie County Investment Co. and The Bailey Company.&nbsp; Paul T.
Bailey disclaims beneficial ownership of the shares held by The Erie County
Investment Co. and The Bailey Company.&nbsp; Paul T. Bailey is the father of
Geoffrey R. Bailey.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>4&nbsp;&nbsp;&nbsp; </sup>Includes 14,000 shares
underlying presently exercisable stock options.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>5&nbsp;&nbsp;&nbsp; </sup>Includes 12,000 shares
underlying presently exercisable stock options and 2,497 warrants to purchase
stock.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>6&nbsp;&nbsp;&nbsp; </sup>Includes 12,000 shares
underlying presently exercisable stock options and 19,999 warrants to purchase
stock.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>7&nbsp;&nbsp;&nbsp; </sup>Includes 89,550 shares
underlying presently exercisable stock options</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>8&nbsp;&nbsp;&nbsp; </sup>Includes 18,790 shares
underlying presently exercisable stock options</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>9&nbsp;&nbsp;&nbsp; </sup>Includes 14,000 shares
underlying presently exercisable stock options and 15,003 warrants to purchase
stock.</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>10&nbsp; </sup>Includes 14,000 shares
underlying presently exercisable stock options and 17,501 warrants to purchase
stock</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>11&nbsp; </sup>Includes 16,500 shares
underlying presently exercisable stock options and 37,500 warrants to purchase
stock</p>

<p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'><sup>12&nbsp; </sup>Does not include
shares held beneficially by The Bailey Company and The Erie County Investment
Co.&nbsp; If those shares were included, the number of shares beneficially held by
all directors and executive officers as a group would be 2,145,373 and the
percentage of class would be 50.13%.</p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:9.0pt;text-align:justify;text-indent:-9.0pt'>*&nbsp;&nbsp; Less than one
percent.</p>

<p class=MsoNormal style='margin-left:9.0pt;text-indent:-9.0pt'>** Under SEC rules,
beneficial ownership includes shares over which the individual or entity has
voting or investment power and any shares which the individual or entity has
the right to acquire within sixty days.</p>

<p class=MsoFooter align=center style='text-align:center'>15</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>










<p class=MsoNormal align=center style='text-align:center'><b>STOCKHOLDER
NOMINATIONS AND OTHER PROPOSALS</b></p>



<p class=MsoNormal style='text-align:justify'>Any stockholder proposal for the Company's
annual meeting of stockholders in 2011 must be received by the Company for the
proposal to be included in the Company's proxy statement and form of proxy for
that meeting.&nbsp; If notice of a proposal for which a stockholder will conduct his
or her own proxy solicitation is not received by the Company by August 15, 2011,
such proposal will be considered untimely pursuant to Rules 14a-4 and 14a-5(e)
of the Securities Exchange Act of 1934, and the person named in proxies
solicited by our Board may use his or her discretionary authority when the
matter is raised at the meeting, without including any discussion of the matter
in the proxy statement.</p>



<p class=MsoNormal align=center style='text-align:center'><b>OTHER MATTERS</b></p>



<p class=MsoNormal style='text-align:justify'>As of the date of this Proxy Statement, our
Board does not intend to present at the Special Meeting any matters other than
those described herein and does not presently know of any matters that will be
presented by other parties.&nbsp; If any other matter is properly brought before the
meeting for action by stockholders, proxies in the enclosed form returned to us
will be voted in accordance with the recommendation of our Board or, in the
absence of such recommendation, in accordance with the judgment of the proxy
holder.</p>



<p class=MsoNormal align=center style='text-align:center'><b>WHERE YOU CAN FIND
MORE INFORMATION</b></p>



<p class=MsoNormal style='text-align:justify'>The Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the &quot;Exchange
Act&quot;).&nbsp; The Company files reports, proxy statements and other information with
the Securities and Exchange Commission (&quot;SEC&quot;).&nbsp; The public may read and copy
any materials that we file with the SEC at the SEC's Public Reference Room at
100 F Street, N.E., Washington D.C. 20549.&nbsp; The public may obtain information
on the operation of the Public Reference Room by calling 1-800-SEC-0330.&nbsp; The
statements and forms we file with the SEC have been filed electronically and
are available for viewing or copy on the SEC maintained Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC.&nbsp; The Internet address
for this site can be found at: www.sec.gov. </p>

<p class=MsoNormal style='text-align:justify'>A copy of our Annual Report on Form 10-K for
the fiscal year ended September 30, 2009 can be found at the SEC's Internet
site.&nbsp; The Annual Report is not incorporated into this Proxy Statement and is
not to be considered a part of these proxy soliciting materials or subject to
Regulations 14A or 14C or to the liabilities of Section 18 of the Exchange Act.&nbsp;
We will provide upon written request, without charge to each stockholder of
record as of the record date, a copy of our Annual Report on Form 10-K for the
fiscal year ended September 30, 2009, as filed with the SEC.&nbsp; Any exhibits
listed in the Form 10-K report also will be furnished upon request at the
actual expense incurred by us in furnishing such exhibits.&nbsp; Any such requests
should be directed to our Corporate Secretary at our principal executive
offices at 601 Corporate Circle, Golden, Colorado 80401.</p>



<p class=MsoNormal style='text-align:justify'><b>STOCKHOLDERS ARE URGED TO IMMEDIATELY MARK,
DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED BUSINESS REPLY
ENVELOPE OR VIA FACSIMILE TO THE ATTENTION OF BOYD E. HOBACK, OUR PRESIDENT AND
CHIEF EXECUTIVE OFFICER, AT (303) 273-0177.&nbsp; YOUR VOTE IS IMPORTANT.</b></p>



<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in'><b>BY
ORDER OF THE BOARD OF DIRECTORS</b></p>

<p class=MsoNormal style='margin-top:6.0pt;margin-right:0in;margin-bottom:6.0pt;
margin-left:0in'><i><u>/s/
Boyd E. Hoback</u></i></p>

<p class=MsoNormal><i>Boyd
E. Hoback</i></p>

<p class=MsoNormal>President
and Chief Executive Officer</p>

<p class=MsoNormal>November
5, 2010</p>



<p class=MsoFooter align=center style='text-align:center'>16</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



</div>

<b><br
clear=all style='page-break-before:always'>
</b>

<div class=WordSection5>









<p class=MsoNormal align=center style='text-align:center'><b>GOOD TIMES
RESTAURANTS INC.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>REVOCABLE PROXY</b></p>



<p class=MsoNormal style='text-align:justify'><b>THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF GOOD TIMES RESTAURANTS INC. IN CONNECTION WITH THE
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 29, 2010.</b></p>



<p class=MsoNormal style='text-align:justify'>The undersigned hereby revokes all previous
proxies, acknowledges receipt of the Notice of the Special Meeting of
Stockholders to be held on November 29, 2010 and the Proxy Statement, and
appoints Boyd E. Hoback and Susan M. Knutson (or either of them), the proxy of
the undersigned, each with full power of substitution, to vote all shares of
common stock of Good Times Restaurants Inc., a Nevada corporation (the
&quot;Company&quot;), that the undersigned is entitled to vote, either on his or her own
behalf or on behalf of any entity or entities, at the Special Meeting of
Stockholders of the Company to be held on November 29, 2010, beginning at 9:00
a.m. local time, at the Company's corporate offices, which are located at 601
Corporate Circle, Golden, Colorado 80401, and at any adjournment or
postponement thereof, with the same force and effect as the undersigned might
or could do if personally present thereat.&nbsp; The shares represented by this
proxy shall be voted in the matter set forth herein.</p>



<p class=MsoNormal style='text-align:justify'><a name="_Toc89840040"></a><a
name="_Toc89839545"><b>PROPOSAL
#1 - APPROVAL OF INVESTMENT TRANSACTION</b></a>:&nbsp; To approve a $2,100,000 equity investment in
the Company through the issuance of 4,200,000 shares of the Company's common stock
to Small Island Investments Limited, a Bermuda corporation, referred to herein
as the &quot;Investment Transaction&quot;.</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:70.65pt;border-collapse:collapse'>
 <tr>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>For</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>[&nbsp;&nbsp; ]</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Against</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>[&nbsp;&nbsp; ]</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Abstain</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>[&nbsp;&nbsp; ]</p>
  </td>
 </tr>
</table>



<p class=MsoNormal style='text-align:justify'><b>PROPOSAL #2 - APPROVAL OF REVERSE STOCK SPLIT</b>:&nbsp; To approve a
proposal to give the Board of Directors discretion to effect a one-for-three reverse
stock split of the Company's common stock following the closing of the
Investment Transaction, referred to herein as the &quot;Reverse Split&quot;.</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:70.65pt;border-collapse:collapse'>
 <tr>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>For</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>[&nbsp;&nbsp; ]</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Against</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>[&nbsp;&nbsp; ]</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Abstain</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>[&nbsp;&nbsp; ]</p>
  </td>
 </tr>
</table>



<p class=MsoNormal style='text-align:justify'>This proxy when properly executed will be
voted in the manner directed by the undersigned.</p>



<p class=MsoNormal style='text-align:justify'><b>If this proxy is properly executed but no
voting directions are given, this proxy will be voted &quot;For&quot; the approval of each
of Proposals #1 and #2 set forth above.</b></p>



<p class=MsoNormal style='text-align:justify'>This proxy also confers discretionary
authority to the proxies to vote on any other matters that may properly be
presented at the meeting.&nbsp; As of the date of the accompanying Proxy Statement,
the Company did not know of any other matters to be presented at the meeting.&nbsp;
If any other matters are properly presented at the meeting, this proxy will be
voted in accordance with the recommendations of the Company's Board of
Directors.</p>



<p class=MsoNormal style='text-align:justify'>Please sign exactly as your name appears
below.&nbsp; When joint tenants hold shares, both should sign.&nbsp; When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such.&nbsp; If a corporation, please sign in full corporate name by the president
or other authorized officer.&nbsp; If a partnership or limited liability company, please
sign in such name by an authorized person.</p>



<p class=MsoNormal style='text-align:justify'>Please complete, date and sign this proxy
card and return it promptly in the accompanying envelope.</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=337 valign=top style='width:252.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Shares Owned: ______________________________ </p>
  </td>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=288 valign=top style='width:3.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Dated: ________________________________ </p>
  </td>
 </tr>
 <tr>
  <td width=337 valign=top style='width:252.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>___________________________________________ </p>
  </td>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=288 valign=top style='width:3.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>______________________________________ </p>
  </td>
 </tr>
 <tr>
  <td width=337 valign=top style='width:252.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Signature of Shareholder </p>
  </td>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=288 valign=top style='width:3.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal style='text-align:justify'>Signature (if held jointly)</p>
  </td>
 </tr>
</table>



<p class=MsoFooter align=center style='text-align:center'>(Sign exactly as name
appears on stock certificate)</p>



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<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>









<p class=MsoNormal align=center style='text-align:center'><b>SECURITIES
PURCHASE AGREEMENT</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal>This Securities Purchase Agreement (this <b>&quot;Agreement&quot;</b>)
is dated as of October 29, 2010, between Good Times Restaurants Inc., a Nevada
corporation (the <b>&quot;Company&quot;</b>), and Small Island Investments Limited, a Bermuda
corporation (the <b>&quot;Investor&quot;</b>).</p>



<p class=MsoNormal>WHEREAS, subject to the terms and conditions set forth in
this Agreement and pursuant to Section 4(2) of the Securities Act (as defined
below), the Company desires to issue and sell to the Investor, and the Investor
desires to purchase from the Company certain securities of the Company, as more
fully described in this Agreement.</p>



<p class=MsoNormal>NOW, THEREFORE, IN CONSIDERATION of the mutual covenants
contained in this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company and the
Investor agree as follows:</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 1.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>DEFINITIONS</b></p>



<p class=MsoNormal>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Definitions</u>.&nbsp; In addition to the terms
defined elsewhere in this Agreement, for all purposes of this Agreement, the
following terms shall have the meanings indicated in this Section 1.1:</p>



<p class=MsoNormal><b>&quot;Action&quot;</b> means any action, suit, inquiry, notice of
violation, proceeding (including any partial proceeding such as a deposition),
or investigation pending or threatened in writing against or affecting the
Company, the Subsidiary, or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency, regulatory authority
(federal, state, county, or local), stock market, stock exchange, or trading
facility.</p>



<p class=MsoNormal><b>&quot;Affiliate&quot;</b> means any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, a Person, as such terms are used in and construed
under Rule 144.</p>



<p class=MsoNormal><b>&quot;Board&quot;</b> means the Board of Directors of the Company.</p>



<p class=MsoNormal><b>&quot;Business Day&quot;</b> means any day except Saturday, Sunday,
and any day which is a federal legal holiday.</p>



<p class=MsoNormal align=center style='text-align:center'>1</p>



<p class=MsoNormal><b>&nbsp;&quot;Closing&quot;</b> means the closing of the purchase and sale
of the Shares pursuant to Article 2.</p>



<p class=MsoNormal><b>&quot;Closing Date&quot;</b> means the first Business Day on which
all of the conditions set forth in Sections 5.1 and 5.2 hereof are satisfied,
or such other date as the parties may agree.</p>



<p class=MsoNormal><b>&quot;Commission&quot;</b> means the U.S. Securities and Exchange
Commission.</p>





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<p class=MsoNormal><b>&quot;Common Stock&quot;</b> means the common stock of the Company,
par value $0.001 per share, and any securities into which such common stock may
hereafter be reclassified.</p>

<p class=MsoNormal><b>&quot;Company Deliverables&quot;</b> has the meaning set forth in
Section 2.3(a).</p>



<p class=MsoNormal><b>&quot;Disclosure Materials&quot;</b> has the meaning set forth in
Section 3.1(h).</p>

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoNormal><b>&quot;Equity Securities&quot;</b> means any (i) Common Stock, (ii)
any debt or equity security of the Company convertible into or exchangeable for
shares of Common Stock, with or without consideration being paid, (iii) any
option, warrant or other right to purchase shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock or any other
security so convertible, or (iv) any debt securities having voting rights,
which shall be included in any calculation of beneficial ownership pursuant to
Rule 13d-3 promulgated under the Exchange Act as the equivalent of shares of
Common Stock having the same voting power.</p>



<p class=MsoNormal><b>&quot;Exchange Act&quot;</b> means the Securities Exchange Act of
1934, as amended.</p>



<p class=MsoNormal><b>&quot;GAAP&quot;</b> means U.S. generally accepted accounting
principles.</p>



<p class=MsoNormal><b>&quot;Investment Amount&quot;</b> means the aggregate purchase
price for the Shares purchased by the Investor.</p>



<p class=MsoNormal><b>&quot;Investor Deliverables&quot;</b> has the meaning set forth in
Section 2.3(b).</p>



<p class=MsoNormal><b>&quot;Lien&quot;</b> means any lien, charge, encumbrance, security
interest, right of first refusal, or other restriction of any kind.</p>



<p class=MsoNormal><a name="OLE_LINK2"><b>&quot;Material Adverse Effect&quot;</b> means
any of (i) a material and adverse effect on the legality, validity, or
enforceability of any Transaction Document, (ii) a material and adverse effect
on the results of operations, assets, liabilities, property, business, or
condition (financial or otherwise) of the Company and the Subsidiary, taken as
a whole, or (iii) a material and adverse </a></p>



<p class=MsoNormal align=center style='text-align:center'>2</p>



<p class=MsoNormal>impairment to the Company's ability to perform on a timely
basis its obligations under any Transaction Document.</p>



<p class=MsoNormal><b>&quot;Person&quot;</b> means an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or
subdivision thereof), or other entity of any kind.</p>



<p class=MsoNormal><b>&quot;Proceeding&quot;</b> means an action, claim, suit,
investigation, or proceeding (including, without limitation, an investigation
or partial proceeding, such as a deposition), whether commenced or threatened.</p>



<p class=MsoNormal><b>&quot;Registration Rights Agreement&quot;</b> means the
Registration Rights Agreement, dated as of the Closing Date, between the
Company and the Investor, in the form of <u>Exhibit A</u> hereto.</p>



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<p class=MsoNormal><b>&quot;Registration Statement&quot;</b> means a registration
statement meeting the requirements set forth in the Registration Rights
Agreement and covering the resale by the Investor of the Shares.</p>



<p class=MsoNormal><b>&quot;Rule 144&quot;</b> means Rule 144 promulgated by the
Commission pursuant to the Securities Act, as such rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.</p>



<p class=MsoNormal><b>&quot;SEC Reports&quot;</b> has the meaning set forth in Section
3.1(h).</p>



<p class=MsoNormal><b>&quot;Securities Act&quot;</b> means the Securities Act of 1933, as
amended.</p>



<p class=MsoNormal><b>&quot;Shares&quot;</b> means the shares of Common Stock to be
purchased by the Investor pursuant to this Agreement.</p>



<p class=MsoNormal><b>&quot;Subsidiary&quot;</b> means Good Times Drive Thru Inc., a
Colorado corporation, a wholly-owned subsidiary of the Company.</p>

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoNormal><b>&quot;Trading Market&quot;</b> means whichever of the New York
Stock Exchange, the American Stock Exchange, the NASDAQ National Market, the
NASDAQ Capital Market, or the OTC Bulletin Board on which the Common Stock is
listed or quoted for trading on the date in question.</p>



<p class=MsoNormal align=center style='text-align:center'>3</p>



<p class=MsoNormal><b>&quot;Transaction Documents&quot;</b> means this Agreement, the Registration
Rights Agreement, and any other documents or agreements executed in connection
with the transactions contemplated hereunder.</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 2.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>PURCHASE AND SALE</b></p>



<p class=MsoNormal>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Purchase and Sale of Shares</u>.&nbsp; Subject to
the terms and conditions set forth in this Agreement, at the Closing the
Company shall issue and sell to the Investor and the Investor shall purchase
from the Company 4,200,000 Shares for an Investment Amount of $2,100,000.</p>



<p class=MsoNormal>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Closing</u>.&nbsp; The Closing shall take place remotely
by the exchange of documents and signatures at 10:00 a.m. (Mountain time) on
the Closing Date or at such other location or time as the parties may agree.</p>



<p class=MsoNormal>2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Closing Deliveries</u>.</p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; At the Closing, the Company shall
deliver or cause to be delivered to the Investor (i) &nbsp;a certificate evidencing the
Shares, registered in the name of the Investor, and (ii) the duly executed
signature page of the Registration Rights Agreement for the Company (together, the
<b>&quot;Company Deliverables</b>&quot;).</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; At the Closing, the Investor shall
deliver or cause to be delivered to the Company (i) the Investment Amount, in
immediately available funds, by wire transfer to an account designated in
writing by the Company for such purpose, and (ii) the duly executed signature
page of the Registration Rights Agreement for the Investor (together, the <b>&quot;Investor
Deliverables&quot;</b>).</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 3.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>REPRESENTATIONS
AND WARRANTIES</b></p>

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoNormal>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Representations and Warranties of the Company</u>.&nbsp;
The Company hereby makes the following representations and warranties to the
Investor, except as set forth on the schedule of exceptions attached as Exhibit
B hereto and made a part hereof by this reference (the &quot;Schedule of
Exceptions&quot;):</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Subsidiaries</u>.&nbsp; The Company has
no direct or indirect subsidiaries other than the Subsidiary.&nbsp; The Company
owns, directly or indirectly, all of the capital stock of the Subsidiary free
and clear of any and all Liens, and all the issued and outstanding shares of
capital stock of the Subsidiary are validly issued and are fully paid,
non-assessable, and free of preemptive and similar rights.</p>



<p class=MsoNormal align=center style='text-align:center'>4</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Organization and Qualification</u>.&nbsp;
The Company and the Subsidiary are each duly incorporated or otherwise
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation, with the requisite power and authority to
own and use its properties and assets and to carry on its business as currently
conducted.&nbsp; Neither the Company nor the Subsidiary is in violation of any of
the provisions of its respective articles of incorporation, bylaws, or other
organizational or charter documents, except where the violation would not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.&nbsp; The Company and the Subsidiary are duly qualified to
conduct their respective businesses, and each is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Authorization; Enforcement</u>.&nbsp;
The Company has the requisite corporate power and authority to enter into and
to consummate the transactions contemplated by each of the Transaction Documents
and otherwise to carry out its obligations thereunder.&nbsp; Upon the approval of
the transactions contemplated by the Transaction Documents by the Company's shareholders,
(i) the execution and delivery of each of the Transaction Documents by the
Company and the consummation by it of the transactions contemplated thereby
shall have been duly authorized by all necessary action on the part of the
Company and no further action shall be required by the Company in connection
therewith, and (ii) each Transaction Document, when delivered in accordance
with the terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.</p>



<p class=MsoNormal align=center style='text-align:center'>5</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Conflicts</u>.&nbsp; Upon the approval
of the transactions contemplated by the Transaction Documents by the Company's shareholders,
the execution, delivery, and performance of the Transaction Documents by the
Company and the consummation by the Company of the transactions contemplated
thereby do not and will not (i) conflict with or violate any provision of the
Company's or the Subsidiary's articles of incorporation, bylaws, or other
organizational or charter documents (including revisions to such organizational
or charter documents made in conjunction with and to effect the provisions of
this Agreement, if applicable, as disclosed in the Schedule of Exceptions), or
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration, or cancellation (with or
without notice, lapse of time, or both) of, any agreement or other instrument
or other understanding to which the Company or the Subsidiary is a party or by
which any property or asset of the Company or the Subsidiary is bound or
affected, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree, or other restriction of any court or governmental
authority to which the Company or the Subsidiary is subject (including federal
and state securities laws and regulations), or by which any property or asset
of the Company or the Subsidiary is bound or affected; except in the case of
each of clauses (ii) and (iii), such as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Filings, Consents, and Approvals</u>.&nbsp;
The Company is not required to obtain any consent, waiver, authorization, or
order of, give any notice to, or make any filing or registration with, any
court or other federal, state, provincial, local, or other United States or
foreign governmental authority in connection with the execution, delivery, and
performance by the Company of the Transaction Documents, other than (i) the
filing with the Commission of preliminary and definitive proxy materials under
the Commission's proxy rules related to approval by the Company's shareholders
of the transactions contemplated by the Transaction Documents; (ii) the filing
with the Commission of one or more Registration Statements in accordance with
the requirements of the Registration Rights Agreement; (iii) the filings
required, if any, in accordance with Section 4.4; (iv) filings required by
federal or state securities laws, including Form D pursuant to Regulation D of
the Securities Act; and (v) those that have been made or obtained prior to the
date of this Agreement.</p>



<p class=MsoNormal align=center style='text-align:center'>6</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Issuance of the Shares</u>.&nbsp; Upon
the approval of the transactions contemplated by the Transaction Documents by
the Company's shareholders, the Shares will have been duly authorized and, when
issued and paid for in accordance with the Transaction Documents, will be duly
and validly issued, fully paid, and nonassessable, free and clear of all
Liens.&nbsp; The Company has reserved from its duly authorized capital stock the
shares of Common Stock issuable pursuant to this Agreement in order to issue
the Shares.</p>



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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Capitalization</u>.&nbsp; The number of
shares and type of all authorized, issued, and outstanding capital stock of the
Company, and all shares of Common Stock reserved for issuance under the
Company's various option and incentive plans, is specified in the Schedule of
Exceptions, which information is accurate as of the date of this Agreement.&nbsp;
Except as specified in the Schedule of Exceptions, no securities of the Company
are entitled to preemptive or similar rights, and no Person has any right of
first refusal, preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by the Transaction Documents.&nbsp;
Except as specified in the Schedule of Exceptions, there are no outstanding
options, warrants, scrip rights to subscribe to, calls, or commitments of any
character whatsoever relating to, or securities, rights, or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company or the
Subsidiary is or may become bound to issue additional shares of Common Stock,
or securities or rights convertible or exchangeable into shares of Common
Stock.&nbsp; The issue and sale of the Shares will not, immediately or with the
passage of time, obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Investor) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange, or reset price under such securities.&nbsp; Except as specified in the
Schedule of Exceptions, no outstanding agreements, plans or provisions of the
Company's articles of incorporation, bylaws or other such documents will affect
the <b>&quot;Shares Purchase Position&quot;</b> of the Investor (defined as such percentage
holding of Company Common Stock as the Investor would have if the Shares
purchase pursuant to Section 2.1 were given effect as of the date of this
Agreement) as set forth on the Closing Capitalization Table attached hereto as <u>Exhibit
C</u>.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>SEC Reports; Financial Statements</u>.&nbsp;
The Company has filed all reports required to be filed by it under the
Securities Act and the Exchange Act, including pursuant to</p>



<p class=MsoNormal align=center style='text-align:center'>7</p>





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<p class=MsoNormal>Section 13(a) or 15(d) thereof, since October 1, 2007 (the
foregoing materials being collectively referred to herein as the <b>&quot;SEC
Reports&quot;</b> and, together with the Schedule of Exceptions, the <b>&quot;Disclosure
Materials&quot;</b>) on a timely basis or has timely filed a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of
any such extension.&nbsp; As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.&nbsp; The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing.&nbsp; Such
financial statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto, and fairly present
in all material respects the financial position of the Company and the
Subsidiary as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Press Releases</u>.&nbsp; To the
Company's best knowledge, the press releases disseminated by the Company since October
1, 2007 taken as a whole do not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made and when made, not misleading.</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal><a name="OLE_LINK1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Material
Changes</u>.&nbsp; Since the date of the Company's most recently filed Form 10-Q,
except as specifically disclosed in the Schedule of Exceptions, (i) there has
been no event, occurrence, or development that has had or that could reasonably
be expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade
payables, accrued expenses, and other liabilities incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company's financial statements pursuant to GAAP
or required to be disclosed in filings made with the Commission, (iii) the
Company has not altered its method of accounting or the identity of its
auditors, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its shareholders or purchased,
redeemed, or made any agreements to purchase or redeem any shares of its
capital stock, and (v) except as disclosed in the Schedule of Exceptions, the
Company has not issued any equity securities to any officer, director, or
Affiliate, except pursuant to existing Company stock option plans. The Company
does not have pending before the Commission any request for confidential
treatment of information.</a></p>



<p class=MsoNormal align=center style='text-align:center'>8</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Litigation</u>.&nbsp; There is no
Action which (i) adversely affects or challenges the legality, validity, or
enforceability of any of the Transaction Documents or the Shares, or (ii)
except as specifically disclosed in the Schedule of Exceptions, could, if there
were an unfavorable decision, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.&nbsp; Neither the
Company nor the Subsidiary, nor any director or officer thereof (in his or her
capacity as such), is or has been the subject of any Action involving a claim
of violation of or liability under any federal, state, or local laws.&nbsp; There
has not been, and to the knowledge of the Company, there is not pending any
investigation by the Commission involving the Company or any current or former
director or officer of the Company (in his or her capacity as such).&nbsp; The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or the
Subsidiary under the Exchange Act or the Securities Act.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Compliance</u>.&nbsp; Neither the
Company nor the Subsidiary (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or the Subsidiary under), nor
has the Company or the Subsidiary received written notice of a claim that it is
in default under or that it is in violation of, any agreement or instrument to
which it is a party or by which it or any of its properties is bound (except
where such default or violation has been waived), (ii) is in violation of any
order of any United States court, arbitrator, or governmental body, or (iii) is
or has been in violation of any statute, rule, or regulation of any United
States governmental authority, including without limitation all federal, state,
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety, and employment and labor matters,
except in each case as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect. The Company is
in compliance with all effective</p>

<p class=MsoNormal>&nbsp;requirements of the Sarbanes-Oxley Act of 2002, as amended,
and the rules and regulations thereunder, that are applicable to it, except
where such noncompliance could not have or reasonably be expected to result in
a Material Adverse Effect. </p>



<p class=MsoNormal align=center style='text-align:center'>9</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Regulatory Permits</u>.&nbsp; The
Company and the Subsidiary possess all certificates, authorizations, and
permits issued by the appropriate federal, state, or local regulatory authorities
necessary to conduct their respective businesses as described in the SEC
Reports, except where the failure to possess such permits could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, and neither the Company nor the Subsidiary has
received any written or other notice of proceedings relating to the revocation
or modification of any such permits.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Title to Assets</u>.&nbsp; Except as
set forth in the Schedule of Exceptions, the Company and the Subsidiary have
good and marketable title in fee simple to all real property owned by them that
is material to their respective businesses and good and marketable title to all
personal property owned by them that is material to their respective businesses,
in each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the Subsidiary.
Any real property and facilities held under lease by the Company and the
Subsidiary are held by them under valid, subsisting, and enforceable leases of
which the Company and the Subsidiary are in compliance, except as could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Insurance</u>.&nbsp; The Company and
the Subsidiary are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which the Company and the Subsidiary are engaged.&nbsp; The
Company has no reason to believe that it will not be able to renew its and the
Subsidiary's existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business on terms consistent with market for the Company's and the
Subsidiary's respective lines of business.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Environmental Matters</u>.&nbsp; The
Company and the Subsidiary are in compliance with all applicable federal,
state, and local laws, regulations, rules, ordinances, and orders which impose
requirements relating to environmental protection, hazardous substances, or</p>

<p class=MsoNormal>public or employee health and safety (collectively, &quot;<b>Environmental
Laws</b>&quot;), except as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.</p>





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<p class=MsoNormal align=center style='text-align:center'>10</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Transactions With Affiliates and
Employees</u>.&nbsp; Except as set forth in the Schedule of Exceptions, none of the
officers or directors of the Company or the Subsidiary and, to the knowledge of
the Company, none of the employees of the Company or the Subsidiary is
presently a party to any transaction with the Company or the Subsidiary (other
than for services as employees, officers, and directors), including any
contract, agreement, or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director, or such
employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director,
trustee, or partner.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Internal Accounting Controls</u>.&nbsp;
The Company and the Subsidiary maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization, and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.&nbsp; The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and designed such disclosure controls and procedures
to ensure that material information relating to the Company, including the
Subsidiary, is made known to the certifying officers by others within those
entities, particularly during the period in which the Company's Form 10-K or
10-Q, as the case may be, is being prepared.&nbsp; The Company's certifying officers
have evaluated the effectiveness of the Company's controls and procedures in
accordance with Item 307 of Regulation S-K under the Exchange Act for the
Company's most recently ended fiscal quarter or fiscal year-end (such date, the
<b>&quot;Evaluation Date&quot;</b>).&nbsp; The Company presented in its most recently filed
Form 10-Q the conclusions of the certifying officers about the effectiveness of
the disclosure controls and procedures based on their evaluations as of the
Evaluation Date.&nbsp; Since the Evaluation Date, there have been no significant
changes in the</p>

<p class=MsoNormal>Company's internal controls (as such term is defined in Item
308(c) of Regulation S-K under the Exchange Act) or, to the Company's
knowledge, in other factors that could significantly affect the Company's
internal controls.</p>



<p class=MsoNormal align=center style='text-align:center'>11</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Certain Fees</u>.&nbsp; Except with
respect to the fees to be paid to Mastodon Ventures, Inc., Woodville Hall
Capital, LLC, and such other fees to be paid with respect to the transactions
contemplated by this Agreement at or after the Closing (the <b>&quot;Closing Fees&quot;</b>)
as set forth in the Schedule of Exceptions, no brokerage or finder's fees or
commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank, or
other Person with respect to the transactions contemplated by this Agreement.&nbsp;
The Investor shall have no obligation with respect to any fees or with respect to
any claims (other than such fees or commissions owed by the Investor pursuant
to written agreements executed by the Investor which fees or commissions shall
be the sole responsibility of the Investor) made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by this Agreement.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Certain Registration Matters</u>.
Assuming the accuracy of the Investor's representations and warranties set
forth in Section 3.2 and pursuant to Section 4.6(b), no registration under the
Securities Act is required for the offer and sale of the Shares by the Company
to the Investor under the Transaction Documents.&nbsp; Except as set forth in the Schedule
of Exceptions, the Company has not granted or agreed to grant to any Person
other than the Investor any rights (including &quot;piggy&#8209;back&quot; registration
rights) to have any securities of the Company registered with the Commission or
any other governmental authority that have not been satisfied.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Listing and Maintenance
Requirements</u>.&nbsp; Except as specified in the Schedule of Exceptions, the
Company has not, in the two years preceding the date hereof, received notice
from any Trading Market to the effect that the Company is not in compliance
with the listing or maintenance requirements thereof.&nbsp; The issuance and sale of
the Shares under the Transaction Documents does not contravene the rules and
regulations of the Trading Market on which the Common Stock is currently listed
or quoted.</p>



<p class=MsoNormal align=center style='text-align:center'>12</p>



<p class=MsoNormal>The Investor acknowledges and agrees that the Company has
not made and does not make any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
this Section 3.1 and the Schedule of Exceptions.</p>



<p class=MsoNormal>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Representations and Warranties of the Investor</u>.&nbsp;
The Investor hereby represents and warrants to the Company as follows:</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Organization; Authority</u>.&nbsp; The
Investor is a corporation duly organized, validly existing, and in good
standing under the laws of Bermuda with the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by the
applicable Transaction Documents and otherwise to carry out its obligations
thereunder. The execution, delivery, and performance by the Investor of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of the Investor.&nbsp; Each of the
Transaction Documents has been (or upon delivery will have been) duly executed
by the Investor, and when delivered by the Investor in accordance with the
terms hereof and thereof, will constitute the valid and legally binding
obligation of the Investor, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, or similar laws relating
to, or affecting generally the enforcement of, creditors' rights and remedies
or by other equitable principles of general application.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Investment Intent</u>.&nbsp; The
Investor is acquiring the Shares as principal for its own account for
investment purposes only and not with a view to or for distributing or
reselling such Shares or any part thereof, without prejudice, however, to the
Investor's right at all times to sell or otherwise dispose of all or any part
of such Shares in compliance with applicable federal and state securities laws
and pursuant to the Registration Rights Agreement.&nbsp; Subject to the immediately
preceding sentence, nothing contained herein shall be deemed a representation
or warranty by the Investor to hold the Shares for any period of time.&nbsp; The
Investor does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Shares.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Investor Status</u>.&nbsp; At the time
the Investor was offered the Shares, it was, and at the date hereof it is, (i)
knowledgeable, sophisticated, and experienced in making, and qualified to make,
decisions with respect to investments in securities representing an investment</p>

<p class=MsoNormal><i>&nbsp;decision similar to that involved in the purchase</i> of
the Shares, including investments in securities issued by the Company and
comparable entities, and (ii) an &quot;accredited investor&quot; as defined in Rule
501(a) under the Securities Act.&nbsp; The Investor shall provide reasonable and
customary information to the Company to confirm its accredited investor
status.&nbsp; The Investor is not a registered broker-dealer under Section 15 of the
Exchange Act.</p>



<p class=MsoNormal align=center style='text-align:center'>13</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Certain Trading Activities</u>.&nbsp;
The Investor has not directly or indirectly, nor has any Person acting on
behalf of or pursuant to any understanding with the Investor, engaged in any
transactions in the securities of the Company since the time that the Investor
was first contacted regarding an investment in the Company.&nbsp; The Investor
covenants that neither it nor any Person acting on its behalf or pursuant to
any understanding with it will engage in any transactions in the securities of
the Company prior to the time that the transactions contemplated by the Transaction
Documents are publicly disclosed.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Reliance on Investor
Representations</u>.&nbsp; The Investor understands that (i) the Shares are being
offered and sold to it in reliance upon specific exemptions from the
registration requirements of the Securities Act and the rules and regulations
promulgated thereunder, and any applicable state or foreign securities laws;
(ii) the Company is relying upon the truth and accuracy of, and the Investor's
compliance with, the representations, warranties, agreements, acknowledgements,
and understandings of the Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of the Investor to acquire
the Shares; and under such laws and rules and regulations the Shares may be
resold without registration under the Securities Act only in certain limited
circumstances.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Risks of Investment</u>.&nbsp; The
Investor understands that its investment in the Shares involves a significant
degree of risk, and the Investor has full cognizance of and understands all of
the risk factors related to the Investor's purchase of the Shares, including,
but not limited to, those set forth in the SEC Reports.&nbsp; The Investor
understands that no representation is being made as to the future value of the Shares.&nbsp;
The Investor has the knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in the Shares
and has the ability to bear the economic risks of an investment in the Shares.</p>



<p class=MsoNormal align=center style='text-align:center'>14</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Approvals</u>.&nbsp; The Investor
understands that no United States federal or state agency or any other
government or governmental agency has passed upon or made any recommendation or
endorsement of the Shares.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Location of Offices</u>.&nbsp; The
Investor's principal executive offices are in the jurisdiction set forth in
Section 7.3 hereof.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Independent Investment Decision</u>.&nbsp;
The Investor has independently evaluated the merits of its decision to purchase
Shares pursuant to the Transaction Documents, and has relied on its own
industry, business and/or legal advisors in making such decision.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Voting Agreements</u>.&nbsp; The
Investor has not entered into any agreement or arrangement regarding the voting
or disposition of the Shares.</p>



<p class=MsoNormal>The Company acknowledges and agrees that the Investor has
not made and does not make any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
this Section 3.2.</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 4</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>OTHER AGREEMENTS
OF THE PARTIES</b></p>



<p class=MsoNormal>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Restrictive Legends on Certificates.</u></p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shares may only be disposed of in
compliance with federal, state, and foreign securities laws or pursuant to the Registration
Rights Agreement.&nbsp; In connection with any transfer of the Shares other than
pursuant to an effective registration statement, to the Company, or to an
Affiliate of the Investor, the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor, the
form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Shares under the Securities Act or any other applicable securities
law.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificates evidencing the Shares
will contain the following legend, until such time as it is not required under
Section 4.1(c):</p>



<p class=MsoNormal style='margin-left:1.0in'>THESE SECURITIES HAVE NOT BEEN
REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY U.S. STATE</p>



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<p class=MsoNormal style='margin-left:1.0in'>&nbsp;OR FOREIGN JURISIDICTION IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE <b>&quot;SECURITIES ACT&quot;</b>), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE AND PROVINCIAL SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY.</p>



<p class=MsoNormal align=center style='text-align:center'>15</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificates evidencing Shares shall
not contain any legend (including the legend set forth in Section 4.1(b)): (i)
with respect to a sale or transfer of such Shares pursuant to an effective registration
statement (including the Registration Statement), or (ii) with respect to a
sale or transfer of such Shares pursuant to Rule 144.&nbsp; The Company agrees that
following the effective date of the initial Registration Statement filed with
the Commission pursuant to the Registration Rights Agreement or at such time as
such legend is no longer required under this Section 4.1(c), it will, no later
than seven Business Days following the delivery by the Investor to the Company
or the Company's transfer agent of a certificate representing Shares issued
with a restrictive legend, together with the written request of the Investor
accompanied by the written representation letter in customary form, deliver or
cause to be delivered to the Investor a certificate representing such Shares
that is free from all restrictive and other legends.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Investor agrees that the removal
of the restrictive legend from certificates representing Shares as set forth in
this Section 4.1 is predicated upon the Company's reliance that the Investor
will sell any such Shares pursuant to either the registration requirements of
the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom.</p>



<p class=MsoNormal align=center style='text-align:center'>16</p>



<p class=MsoNormal>4.2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Furnishing of Information.</u></p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company covenants to timely file
(or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Securities Act and the Exchange Act.&nbsp; The Company further
covenants that it will take such further action as any holder of Shares may
reasonably request, all to the extent required from time to time to enable such
Person to sell the Shares without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144.</p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Investor covenants to timely file
all reports required to be filed by the Investor after the date hereof pursuant
to the Exchange Act, including Sections 13(d) and 16(a) thereof. </p>



<p class=MsoNormal>4.3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Indemnification</u>.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In addition to the indemnity provided
in the Registration Rights Agreement, the Company will indemnify and hold the
Investor and its directors, officers, managers, shareholders, investors,
members, partners, employees, and agents (each, an <b>&quot;Investor Party&quot;</b>)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs, and expenses, including all judgments, amounts
paid in settlements, court costs, and reasonable attorneys' fees and costs of
investigation (collectively, <b>&quot;Losses&quot;</b>), that any such Investor Party may
suffer or incur as a result of or relating to any misrepresentation, breach, or
inaccuracy of any representation, warranty, covenant, or agreement made by the
Company in any Transaction Document.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In addition to the indemnity provided
in the Registration Rights Agreement, the Investor will indemnify and hold the
Company and its directors, officers, managers, shareholders, investors,
members, partners, employees, and agents (each, a <b>&quot;Company Party&quot;</b>) harmless
from any and all Losses that any such Company Party may suffer or incur as a
result of or relating to any misrepresentation, breach, or inaccuracy of any
representation, warranty, covenant, or agreement made by the Investor in any
Transaction Document.</p>



<p class=MsoNormal align=center style='text-align:center'>17</p>



<p class=MsoNormal>4.4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Listing of Shares.</u>&nbsp; The Company agrees, (i)
it will utilize its best efforts to continue the listing and trading of its
Common Stock on its current Trading Market on the date of this Agreement and
will comply in all material respects with the Company's reporting, filing, and
other obligations under the bylaws or rules of such Trading Market, (ii) it
will make such required notice or other filing with respect to the transactions
contemplated by this Agreement and the Shares with its current Trading Market
and obtain any approvals, and (iii) if the Company applies to have the Common
Stock traded on any Trading Market other than that of the date of this
Agreement, it will include in such application the Shares, and will take such
other action as is necessary or desirable to cause the Shares to be listed on
such other Trading Market as promptly as possible.</p>



<p class=MsoNormal>4.5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Conduct of Business Prior to Closing</u>.&nbsp; From
the date hereof until the Closing, except as otherwise provided in this
Agreement or consented to in writing by the Investor (which consent shall not
be unreasonably withheld or delayed), the Company and the Subsidiary shall
conduct their respective businesses in the ordinary course consistent with past
practice, and, at the Closing, the Company shall deliver to the Investor a
Certificate of Good Standing for each of the Company and the Subsidiary.&nbsp; For
the purposes of this provision, the closing of any location or any sale of
assets, except as disclosed in the Schedule of Exceptions, shall not be
considered to be operation of business in the ordinary course and is subject to
notice to and consent by the Investor.</p>



<p class=MsoNormal>4.6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Investor Further Due Diligence</u>.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For a period beginning on the date of
this Agreement and ending at 4:30 p.m. (Mountain time) on November 1, 2010 (the
<b>&quot;Due Diligence Period&quot;</b>), the Company and the Subsidiary will, and will
cause their respective officers, directors, managers, employees, or agents to,
(i) afford the Investor and its representatives full and free access to the
Company's and the Subsidiary's personnel, properties, contracts, books and
records, and other existing documents and data (the <b>&quot;Due Diligence
Materials&quot;</b>), (ii) furnish the Investor and its advisors with copies of all
such Due Diligence Materials, and (iii) furnish the Investor and its advisors
with additional financial, operating, and other data and information as the
Investor may reasonably request.&nbsp; Any investigation by the Investor during the
Due Diligence Period shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of the Company and the
Subsidiary.&nbsp; All information furnished to the Investor and its advisors during
the Due Diligence Period shall be treated as confidential information pursuant
to the existing confidentiality agreement between the Company and the Investor
(the <b>&quot;Confidentiality Agreement&quot;</b>), subject to any amendment thereto
required in order that such Confidentiality Agreement provides that the
Investor agrees to maintain any material nonpublic information in confidence in
compliance with Regulation FD under the Securities Act.</p>



<p class=MsoNormal align=center style='text-align:center'>18</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; At or prior to the end of the Due
Diligence Period, the Investor shall provide written notice to the Company (the
<b>&quot;Due Diligence Completion Notice&quot;</b>) specifying that the Investor has
completed its financial, legal and other due diligence examination of the
Company and that either (i) the Investor is satisfied with such examination and
the Agreement remains in full force and effect, or (ii) the Investor is not
satisfied with such examination and is electing to terminate this Agreement
pursuant to the provisions of Section 6.1(f).&nbsp; Termination by the Investor pursuant
to clause (ii) of the foregoing sentence may be for any reason. Notwithstanding
the foregoing, at the election and in the discretion of the Investor, and subject
to the approval of the Company (which approval the Company may elect for any
reason to withhold in its discretion), such termination may be deferred
accompanied by a request for further diligence information and/or additional time
to review such diligence information prior to the Investor's determination
under clause (i) or (ii) above.&nbsp; If the Investor provides notice of the
satisfactory completion of its due diligence (the <b>&quot;Satisfactory Completion
of Due Diligence&quot;</b>) pursuant to clause (i) of this Section 4.6(b), the
Investor shall provide a representation and warranty to the Company that the
Investor has been afforded (x) the opportunity to ask such questions as it has
deemed necessary and to receive answers from representatives of the Company
concerning the terms and conditions of the offering of the Shares and the
merits and risks of investing in the Shares, (y) access to information about
the Company and the Subsidiary and their respective financial condition,
results of operation, business, properties, management, and prospects
sufficient to enable it to evaluate its investment, and (z) the opportunity to
obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Immediately upon receipt of the Due
Diligence Completion Notice, the Company shall provide notice for and schedule
a special meeting of shareholders (<b>&quot;Special Meeting&quot;</b>) to</p>



<p class=MsoNormal align=center style='text-align:center'>19</p>





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<p class=MsoNormal>be held as soon as possible after the execution of this
Agreement for the purposes of effecting the transactions and other actions
contemplated by this Agreement.&nbsp; During the Due Diligence Period, the Company
shall prepare proxy materials for the Special Meeting and shall provide copies thereof
to the Investor for review and approval prior to filing.&nbsp; The Company shall
immediately notify the Investor if preliminary proxy materials are required to
be filed with respect to the Special Meeting or other such delay in obtaining
shareholder approval occurs.&nbsp; During the Due Diligence Period, the Company
shall prepare any NASDAQ filings with respect to the transactions contemplated
by this Agreement and the Shares and shall provide copies thereof to the Investor
for review and approval prior to filing during such period.&nbsp; If no such filings
are required during this period, and in any event, the Company shall provide
the Investor with an update (or updates, as applicable) as to the status of any
NASDAQ filings and/or approvals.</p>



<p class=MsoNormal>4.7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Solicitation of Other Bids.</u></p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For a period of sixty days after the
date of this Agreement, or, if earlier, until the Closing or the termination of
this Agreement, and provided that the Investor has not failed to notify the Company
of the satisfactory completion of its due diligence in accordance with Section
4.6(b) or otherwise terminated this Agreement, the Company shall not, and shall
not authorize or permit any of its officers, directors, employees, or agents,
or any investment banker, financial advisor, attorney, accountant, or other
advisor or representative retained by it, to, directly or indirectly, solicit,
initiate, or encourage (including by way of furnishing non-public information),
or take any other action to facilitate, any inquiries or the making of any
proposal or offer that constitutes, or may reasonably be expected to lead to,
an Acquisition Proposal, or (ii) participate in any discussions or negotiations
regarding an Acquisition Proposal.&nbsp; For purposes of this Section 4.7(a), <b>&quot;Acquisition
Proposal&quot;</b> shall mean any inquiry, proposal, or offer from any Person (other
than the Investor or any of its Affiliates) concerning (i) a merger,
consolidation, liquidation, recapitalization, share exchange, or other business
combination transaction involving the Company, (ii) the acquisition of a
significant number of shares of Common Stock or other Equity Securities of the
Company, or (iii) the purchase, lease, exchange, or other acquisition of any
significant portion of the Company's or the Subsidiary's properties or assets.</p>



<p class=MsoNormal align=center style='text-align:center'>20</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notwithstanding Section 4.7(a), if at
any time prior to the approval of the Transaction Documents by the Company's shareholders,
the Board determines in good faith, based on the advice of outside legal
counsel, that failure to do so would be reasonably likely to constitute a
breach of its fiduciary duties to the Company's shareholders under applicable
law, the Company, in response to a bona fide Acquisition Proposal that (i) was
unsolicited or that did not otherwise result from a breach of this Section 4.7,
and (ii) is reasonably likely to lead to a Superior Proposal, may (x) furnish
non-public information with respect to the Company to the Person who made such
Acquisition Proposal pursuant to a customary confidentiality agreement
(provided that the Company also furnishes such nonpublic information to the
Investor, to the extent that such nonpublic information has not been previously
furnished by the Company to the Investor), and (y) participate in discussions
and negotiations regarding such Acquisition Proposal.&nbsp; For purposes of this
Section 4.7(b), <b>&quot;Superior Proposal&quot;</b> shall mean a bona fide unsolicited
written Acquisition Proposal which the Board determines in its good faith
judgment (after consultation with the Company's outside legal counsel and
independent financial advisor) to be (A) on terms superior in value from a
financial point of view to the Company's shareholders than the transactions
contemplated by the Transaction Documents, taking into account all the terms
and conditions of such proposal and the Transaction Documents (including any
offer by the Investor to amend the terms of the transactions contemplated by
the Transaction Documents) and (B) reasonably capable of being completed, taking
into account all financial, regulatory, legal, and other aspects of such
proposal.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company shall promptly (but in
any event within 24 hours) advise the Investor in writing of any Acquisition
Proposal or any inquiry regarding the making of an Acquisition Proposal,
including any request for information, the material terms and conditions of
such request, Acquisition Proposal, or inquiry, and the identity of the Person
making such request, Acquisition Proposal, or inquiry.&nbsp; The Company will, to the
extent reasonably practicable, keep the Investor fully informed of the status
and details (including amendments or proposed amendments) of any such request,
Acquisition Proposal, or inquiry.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the Company has received a Superior
Proposal and, after providing the Investor with a ten-day period in which to
match the Superior Proposal with equivalent value from a financial point of
view to the Company's shareholders, the Board has determined in good faith,
based upon the advice of outside legal counsel, that it is necessary for the
Board to terminate this</p>

<p class=MsoNormal>Agreement in order to comply with its fiduciary duties under
applicable law and has notified the Investor in writing of such determination, the
Company may terminate this Agreement upon payment of the termination fee
required by Section 6.2.</p>



<p class=MsoNormal align=center style='text-align:center'>21</p>



<p class=MsoNormal>4.8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Use of Proceeds</u>.&nbsp; Subject to Investor
approval, the Company shall use the net proceeds from the sale of the Shares
hereunder to refinance prior obligations of the Company and the Subsidiary
existing on the Closing Date, to pay other obligations and expenses of the
Company and the Subsidiary, for general working capital purposes, including
capital expenditures, of the Subsidiary, for costs and expenses resulting from
the Transaction Documents, and for other purposes acceptable to and approved by
the Investor.&nbsp; Such use of proceeds shall include payments by the Company to W
Capital Inc., John W. McDonald, and Golden Bridge LLC (collectively, the <b>&quot;Bridge
Lenders&quot;</b>) in the aggregate principal amount of $585,000 payable to such
Bridge Lenders.&nbsp; The aggregate amount of interest owed to W Capital Inc. and
John W. McDonald shall be converted into shares of Common Stock at a conversion
ratio of $0.50 of the amount owed for each share of Common Stock.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Board Composition</u>.&nbsp; So long as
the Investor holds at least fifty percent of the Company's then-outstanding
capital stock, (i) the Board shall not consist of more than seven directors,
and (ii) the Investor shall have a right to designate four members of the
Company's Board (the <b>&quot;Investor Designees&quot;</b>), and the Company agrees to
include the Investor Designees on its recommended slate of directors
recommended for approval at each annual meeting of the Company's shareholders.&nbsp;
The Investor shall vote its shares in any election of directors in favor of (x)
its four designees, (y) one Person designated by The Bailey Company (the <b>&quot;Bailey
Designee&quot;</b>), and (z) one Person designated by Eric W. Reinhard (the <b>&quot;Reinhard
Designee&quot;</b>); provided, however, that if The Bailey Company or Eric W.
Reinhard (in each case, together with its or his Affiliates) ceases to own at
least 600,000 shares of the Company's Common Stock (adjusted for any stock
splits, reverse splits or similar capital stock transactions), then in lieu of
the Bailey Designee or the Reinhard Designee, as the case may be, the Investor
agrees to vote its shares in any election of directors in favor of a Person,
other than an Investor Designee, who receives the majority of votes of holders
of Common Stock other than the Investor.&nbsp; The Investor agrees that The Bailey
Company and Eric W. Reinhard constitute third party beneficiaries of the
foregoing provision.&nbsp; The Bailey Company and Eric W. Reinhard shall have
entered into a customary voting agreement whereby they agree to vote their
shares in favor of the Investor Designees, as well as in favor of the
transactions contemplated by this Agreement and submitted for shareholder
approval.</p>



<p class=MsoNormal align=center style='text-align:center'>22</p>



<p class=MsoNormal>4.10.&nbsp;&nbsp;&nbsp; <u>Purchase Rights</u>.&nbsp; For a period of three
years following the Closing and provided the Investor continues to hold at
least eighty percent of the Shares, the Company hereby grants to the Investor
rights to purchase securities of the Company for the purpose of maintaining up
to its percentage ownership interest in the Company, as set forth in the
provisions below.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Subsequent Offerings</u>.&nbsp; The
Investor shall have a right of first refusal (the <b>&quot;Purchase Right&quot;</b>) to
purchase up to its <b>&quot;Pro Rata Share&quot;</b> of all Equity Securities which may
be issued and sold by the Company other than those excluded pursuant to Section
4.10(c) below.&nbsp; The Investor's Pro Rata Share shall be calculated as of the
time immediately prior to the issuance of such Equity Securities by the Company
as the ratio of (i) the number of shares of Common Stock beneficially owned by
the Investor at such time to (ii) the total number of shares of Common Stock of
the Company outstanding on a fully diluted basis at such time</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Exercise of Rights</u>.</p>



<p class=MsoNormal>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the Company proposes to issue any
Equity Securities, it shall first give the Investor written notice (the <b>&quot;Company's
Issuance Notice&quot;</b>) of its intention, describing the Equity Securities, the
price and the other terms and conditions upon which the Company proposes to
issue such Equity Securities.&nbsp; The Investor shall have ten Business Days after
the giving of the Company's Issuance Notice to agree to purchase up to its Pro Rata
Share of the Equity Securities, for the price and upon the other terms and
conditions specified in the notice, by giving written notice to the Company
(the <b>&quot;Investor's Purchase Notice&quot;</b>) and stating therein the quantity of
such Equity Securities to be purchased.&nbsp; If the Investor exercises its Purchase
Right hereunder, the Company and the Investor shall then effect the sale and
purchase of the Equity Securities at the closing of the issuance of Equity
Securities described in the Company's Issuance Notice.&nbsp; On the date of such
closing, the Company shall deliver to the Investor the certificates
representing the Equity Securities to be purchased by the Investor, each certificate
to be properly endorsed for transfer, and at such time, the Investor shall pay
the purchase price for the Equity Securities.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Issuance of Equity
Securities to Other Persons</u>.&nbsp; If the Investor fails to exercise in full its
Purchase Right, the Company shall have sixty days thereafter to sell the Equity
Securities in respect of which the Investor's Purchase Right was not exercised,
at a price and upon general terms and conditions no more favorable to the
purchasers thereof than specified in the Company's Issuance Notice.&nbsp; If the
Company has not sold such Equity Securities within such sixty days, the Company
shall not thereafter issue or sell any Equity Securities, without first again
complying with this Section 4.10.</p>



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<p class=MsoNormal align=center style='text-align:center'>23</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Exercise of Options
and Warrants</u>.&nbsp; Notwithstanding the foregoing, the Investor's Purchase Right
with respect to Common Stock issued by the Company upon the exercise of
incentive stock options or warrants outstanding on the date of this Agreement
or subsequently issued pursuant to the Company's existing equity incentive plan
shall be governed exclusively by Section 4.10(d).</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Excluded Securities</u>.&nbsp; The
Purchase Rights established by this Section 4.10 shall have no application to
any of the following Equity Securities: </p>

<p class=MsoNormal>Subject to the applicable provisions of the Registration
Rights Agreement, Equity Securities issued and sold by the Company in an
underwritten public offering thereof under a then-effective registration
statement under the 1933 Act; or</p>

<p class=MsoNormal>Any Common Stock issued as consideration in connection with
or relating to any acquisitions, mergers or strategic partnership transactions
of the Company or the Subsidiary (other than transactions entered into
primarily for equity financing purposes) that have been approved by the Board
after the Closing Date.</p>

<p class=MsoNormal><u>Exercise of Options and Warrants</u>.&nbsp; Upon the exercise
of any incentive stock options or warrants outstanding on the date of this
Agreement or subsequently issued pursuant to the Company's existing stock
incentive plan, the Company shall provide the Investor with notice of such
exercise and the Investor shall have a period of ten Business Days after such
notice to purchase shares at the same price as applicable in such exercise in
an amount necessary to maintain its Pro Rata Share of the Company's Common
Stock.</p>



<p class=MsoNormal>4.11.&nbsp;&nbsp;&nbsp; <u>Adjustments.</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Stock Dividends, Combinations, or&nbsp;
Splits</u>.&nbsp; If, prior to the Closing, the outstanding shares of Common Stock
are subdivided, by stock split, or otherwise, into a greater number of shares
of Common Stock, or if the Company shall declare or pay any dividend on the
Common Stock payable in shares of Common Stock, then the number of Shares
issuable to the Investor at the Closing shall be proportionately increased, and
the purchase price per share shall be proportionately decreased, upon the
occurrence of such event.&nbsp; If, prior to the Closing, the outstanding shares of
Common Stock are combined or consolidated, by reclassification, reverse stock
split, or otherwise, into a lesser number of shares of Common Stock, then the
number of Shares issuable to the Investor at the Closing shall be
proportionately decreased, and the purchase price per Share shall be
proportionately increased, upon the occurrence of such event.</p>



<p class=MsoNormal align=center style='text-align:center'>24</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Reorganization or Reclassification</u>.&nbsp;
If, prior to the Closing, the Common Stock is changed into the same or a
different number of shares of any other class or series of stock, whether by
capital reorganization, reclassification or otherwise, then the Investor shall
have the right to purchase and receive at the Closing, in lieu of the Shares, a
number of shares of such other class or series of stock equivalent to the
number of shares of such class or series that the Investor would have received
had the Shares been issued to the Investor immediately prior to such reclassification,
capital reorganization or change.</p>



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<p class=MsoNormal>4.12.&nbsp;&nbsp;&nbsp; <u>Best Efforts.</u>&nbsp; Each party shall use its
commercially reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to consummate the
transactions contemplated by the Transaction Documents as soon as practicable
after the date hereof.</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 5.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CONDITIONS
PRECEDENT TO CLOSING</b></p>



<p class=MsoNormal>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Conditions Precedent to the Obligations of the
Investor to Purchase Shares</u>.&nbsp; The obligation of the Investor to acquire Shares
at the Closing is subject to the satisfaction or waiver by the Investor, at or
before the Closing, of each of the following conditions:</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Representations and Warranties</u>.&nbsp;
The representations and warranties of the Company contained herein shall be
true and correct in all material respects (or true and correct in all respects
as to representations and warranties which are qualified by materiality) as of
the date when made and as of the Closing as though made on and as of such date;</p>



<p class=MsoNormal align=center style='text-align:center'>25</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Performance</u>.&nbsp; The Company
shall have performed, satisfied, and complied in all material respects with all
covenants, agreements, and conditions required by the Transaction Documents to
be performed, satisfied, or complied with by it at or prior to the Closing;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Consents</u>.&nbsp; The Company shall
have received all consents, waivers, authorizations, and approvals from third
parties necessary in connection with the transactions contemplated by the
Transaction Documents, including, but not limited to, (i) consents from certain
Bridge Lenders with respect to the conversion of accrued interest into Common
Stock in accordance with Section 4.8, (ii) a waiver from Boyd E. Hoback of any
acceleration of his outstanding stock options and of his right to sell all or
any portion of his shares to the Company upon a change of control at the
Closing, and (iii) any consents or waivers with respect to any outstanding agreements
regarding board composition rights or rights to Common Stock (by conversion
rights, option rights, warrants or otherwise) that are in conflict with any
provision of this Agreement or consents with respect to outstanding debt
facilities (as referenced in this Agreement or in Sections 3.1(d), 3.1(l) or
other such section of the Schedule of Exceptions), and no such consent, waiver,
authorization, or approval shall have been revoked;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Injunction</u>.&nbsp; No statute,
rule, regulation, executive order, decree, ruling, or injunction shall have
been enacted, entered, promulgated, or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by the Transaction Documents;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Adverse Changes</u>.&nbsp; Since the
date of execution of this Agreement, no event or series of events shall have
occurred that constitute or reasonably could have or result in a Material
Adverse Effect;</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Suspensions of Trading in
Common Stock; Listing</u>.&nbsp; Trading in the Common Stock shall not have been
suspended by the Commission or any Trading Market (except for any suspensions
of trading of not more than one Business Day solely to permit dissemination of
material information regarding the Company) at any time since the date of
execution of this Agreement, the Common Stock shall have been at all times
since such date listed for trading on a Trading Market, and the Company shall
have obtained all approvals necessary for continued listing of its Common Stock
on a Trading Market</p>



<p class=MsoNormal align=center style='text-align:center'>26</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Shareholder Approval</u>.&nbsp; The
Company's shareholders shall have authorized and approved (i) the issuance and
sale of the Shares in accordance with the terms and provisions of this
Agreement, (ii) a reverse split of the Company's Common Stock to take effect following
the Closing intended to be sufficient to allow the Company to comply with NASDAQ
trading price listing requirements, if applicable, and (iii) any other matter
required to be submitted for shareholder approval in order to give full effect
to any provision of this Agreement or the transactions contemplated herein
(including, but not limited to, for example, any shareholder approval of the
Investor's Board designates pursuant to Section 5.1(h) required under state or federal
law);</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Board Composition</u>.&nbsp; With
respect to the composition of the Board, the Company shall have (i) received
the resignations of four of its current directors, including the current
Chairman of the Board and one member of the Audit Committee, (ii) taken all
necessary corporate action to fill the four vacancies created by such
resignations, effective as of the Closing Date, with the four persons
designated by the Investor who are approved by the Company, which approval
shall not be unreasonably withheld, and (iii) provided appropriate notice of
and scheduled a meeting of the Board to be held immediately following the
Closing;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Management Incentive Program</u>.&nbsp;
The Company shall have adopted the new a management incentive program, in a
form satisfactory to the Investor, to apply from and after the Closing;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Satisfactory Completion of Due
Diligence</u>.&nbsp; The Investor shall have notified the Company of its
Satisfactory Completion of Due Diligence pursuant to Section 4.6(b); and</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Company Deliverables</u>.&nbsp; The
Company shall have delivered the Company Deliverables in accordance with
Section 2.3(a).</p>



<p class=MsoNormal>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Conditions Precedent to the Obligations of the
Company to Sell Shares</u>.&nbsp; The obligation of the Company to sell Shares at
the Closing is subject to the satisfaction or waiver by the Company, at or
before the Closing, of each of the following conditions:</p>



<p class=MsoNormal align=center style='text-align:center'>27</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Representations and Warranties</u>.&nbsp;
The representations and warranties of the Investor contained herein shall be
true and correct in all material respects as of the date when made and as of
the Closing Date as though made on and as of such date;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Performance</u>.&nbsp; The Investor
shall have performed, satisfied, and complied in all material respects with all
covenants, agreements, and conditions required by the Transaction Documents to
be performed, satisfied, or complied with by the Investor at or prior to the
Closing;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Consents</u>.&nbsp; The Company shall
have received all consents, waivers, authorizations, and approvals from third
parties necessary in connection with the transactions contemplated by the
Transaction Documents, including, but not limited to, (i) consents from certain
Bridge Lenders with respect to the conversion of accrued interest into Common
Stock in accordance with Section 4.8, (ii) a waiver from Boyd E. Hoback of any
acceleration of his outstanding stock options and of his right to sell all or
any portion of his shares to the Company upon a change of control at the
Closing, and (iii) any consents or waivers with respect to any outstanding
agreements regarding board composition rights or rights to Common Stock (by
conversion rights, option rights, warrants or otherwise) that are in conflict
with any provision of this Agreement or consents with respect to outstanding
debt facilities (as referenced in this Agreement or in Sections 3.1(d), 3.1(l)
or other such section of the Schedule of Exceptions), and no such consent,
waiver, authorization, or approval shall have been revoked;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Injunction</u>.&nbsp; No statute,
rule, regulation, executive order, decree, ruling, or injunction shall have
been enacted, entered, promulgated, or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by the Transaction Documents;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Fairness Opinion</u>.&nbsp; The Company
shall have received an opinion from its financial advisor that as of the date
of this Agreement, the consideration to be received by the Company as a result
of the consummation of the transactions contemplated by the Transaction
Documents is fair to the Company from a financial point of view;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Shareholder Approval</u>.&nbsp; The
Company's shareholders shall have authorized and approved (i) the issuance and
sale of the Shares in accordance with the terms and provisions of this
Agreement, (ii) a reverse split of the Company's Common Stock to take effect
following the Closing intended to be sufficient to allow the Company to comply
with NASDAQ trading price listing requirements, if applicable, and (iii) any
other matter required to be submitted for shareholder approval in order to give
full effect to any provision of this Agreement or the transactions contemplated
herein (including, but not limited to, for example, any shareholder approval of
the Investor's Board designates pursuant to Section 5.1(h) required under state
or federal law); and</p>



<p class=MsoNormal align=center style='text-align:center'>28</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Investor Deliverables</u>.&nbsp; The
Investor shall have delivered its Investor Deliverables in accordance with
Section 2.3(b).</p>





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<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 6.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>TERMINATION PRIOR
TO CLOSING</b></p>



<p class=MsoNormal>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Termination</u>.&nbsp; This Agreement may be
terminated and the transactions contemplated hereunder abandoned at any time prior
to the Closing only as follows:</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Investor or the Company, upon
written notice to the other, if the Closing shall not have taken place and all
conditions thereto have not been satisfied by 6:30 p.m., Mountain Time, on November
30, 2010, or such later date as may be required solely in order to seek the
approval of the Company's shareholders; provided, that the right to terminate
this Agreement pursuant to this Section 6.1(a) shall not be available to any
party whose failure to perform any of its obligations under this Agreement is
the primary cause of the failure of the Closing to have occurred by such date
and time; or</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Investor or the Company if the
Company's shareholders do not vote to approve the issuance and sale of the Shares
at a shareholder meeting duly called and held for such purposes or any
adjournment or postponement thereof; or </p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; at any time by mutual agreement of
the Company and the Investor; or</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Investor, if there has been a
material breach of any representation or warranty, or covenant or obligation,
of the Company contained herein and the same has not been cured within 15 days
after notice thereof; or</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Company, if there has been a
material breach of any representation, warranty, or covenant of the Investor
contained herein and the same has not been cured within 15 days after notice
thereof; or</p>



<p class=MsoNormal align=center style='text-align:center'>29</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Investor, by giving written
notice to the Company pursuant to Section 4.6(b); or</p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Company, if the Investor fails
to provide the Due Diligence Completion Notice required by Section 4.6(b); or</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Company in accordance with
Section 4.7(d).</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Effect of Termination; Termination Fee.</u></p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Except as set forth in Sections
6.2(b), any termination pursuant to this Section 6 shall be without liability
on the part of any party, unless such termination is the result of a material
breach of this Agreement by a party to this Agreement in which case such
breaching party shall remain liable for such breach notwithstanding any
termination of this Agreement.</p>

<p class=MsoNormal>In the event this Agreement is terminated by the Company
pursuant to Section 6.1(h), the Company shall pay to the Investor, by wire
transfer of immediately available funds, a termination fee in the amount of $150,000.
</p>



<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoNormal>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Extension; Waiver.</u>&nbsp; At any time prior to
the Closing, the Investor or the Company may (a) extend the time for the
performance of any of the obligations of the other party hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto, and (c) waive compliance
with any of the agreements or conditions for the benefit of such party
contained herein.&nbsp; Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 7.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>MISCELLANEOUS</b></p>



<p class=MsoNormal>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Fees and Expenses</u>.&nbsp; Each party shall pay
the expenses incurred by such party incident to the negotiation, preparation,
execution, delivery, and performance of the Transaction Documents.&nbsp; The Company
shall pay all stamp and other taxes and duties levied in connection with the
sale of the Shares.</p>



<p class=MsoNormal>7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Entire Agreement.</u>&nbsp; The Transaction
Documents, together with the Exhibits and Schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings, discussions, and
representations, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits, and
schedules.</p>



<p class=MsoNormal align=center style='text-align:center'>30</p>



<p class=MsoNormal>7.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Notices.</u>&nbsp; Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of
(a) the date of transmission, if such notice or communication is delivered via
facsimile on a Business Day, (b) the Business Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or
(c) upon actual receipt by the party to whom such notice is required to be
given.&nbsp; The address for such notices and communications shall be as follows:</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:27.9pt;border-collapse:collapse'>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>If to the Company:</p>
  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Good Times Restaurants Inc.</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>601 Corporate Circle</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Golden, CO 80401</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Facsimile: (303) 384-1400</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Attention:&nbsp; Boyd E. Hoback, President &amp; CEO</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>If to the Investor:</p>
  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Small Island Investments Limited</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>50 Congress Street, Suite 900</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Boston, MA 02109</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Facsimile: (617) 720-2102</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Attention: Gary Heller</p>
  </td>
 </tr>
</table>



<p class=MsoNormal>or such other address as may be designated in writing
hereafter, in the same manner, by such Person.</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

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<p class=MsoNormal>7.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Amendments; Waivers; No Additional
Consideration.</u>&nbsp; Except as provided in Section 6.3 above, no provision of
this Agreement may be waived or amended except in a written instrument signed
by the Company and the Investor.&nbsp; No waiver of any default with respect to any
provision, condition, or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition, or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.</p>



<p class=MsoNormal>7.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Construction.</u>&nbsp; The headings herein are for
convenience only, do not constitute a part of this Agreement, and shall not be
deemed to limit or affect any of the provisions hereof.&nbsp; The language used in
this Agreement will be deemed to be the language chosen by the parties and
their counsel to express their mutual intent, and no rules of strict
construction will be applied against any party.&nbsp; This Agreement shall be
construed as if drafted jointly by the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement or any of the Transaction Documents.</p>



<p class=MsoNormal>7.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Successors and Assigns.</u>&nbsp; The rights and
obligations of the parties hereto shall inure to the benefit of and shall be
binding upon the authorized successors and permitted assigns of each party.&nbsp; No
party may assign its rights or obligations under this Agreement or designate
another person (i) to perform all or part of its obligations under this
Agreement or (ii) to have all or part of its rights and benefits under this
Agreement, in each case without the prior written consent of the other party,
provided, however, that the Investor may assign its rights and delegate its
duties hereunder in whole or in part to an Affiliate without the prior written
consent of the Company; provided, that no such assignment shall affect the
obligations of the Investor hereunder.&nbsp; In the event of any assignment in
accordance with the terms of this Agreement, the assignee shall specifically
assume and be bound by the provisions of this Agreement by executing and
agreeing to an assumption agreement reasonably acceptable to the other party.</p>



<p class=MsoNormal>7.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Third-Party Beneficiaries.</u>&nbsp; This
Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Section 4.4.</p>



<p class=MsoNormal>7.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Governing Law.</u>&nbsp; All questions concerning
the construction, validity, enforcement, and interpretation of this Agreement
shall be governed by and construed and enforced in accordance with the internal
laws of the State of Nevada, without regard to the principles of conflicts of
law thereof.&nbsp; If any party shall commence a Proceeding to enforce any provision
of a Transaction Document, then the prevailing party in such Proceeding shall
be reimbursed by the other party to the Proceeding for its reasonable
attorneys' fees and other costs and expenses incurred with the investigation,
preparation, and prosecution of such Proceeding.</p>



<p class=MsoNormal align=center style='text-align:center'>32</p>





<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



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clear=all style='page-break-before:always'>










<p class=MsoNormal>7.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Survival</u>.&nbsp; The representations, warranties,
agreements, and covenants contained herein shall survive the Closing and the
delivery of the Shares for a period of 12 months thereafter, after which time
they shall expire and be of no further force or effect.</p>



<p class=MsoNormal>7.10&nbsp;&nbsp;&nbsp;&nbsp; <u>Execution</u>.&nbsp; This Agreement may be executed
in counterparts, all of which when taken together shall be considered one and
the same agreement, and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart.&nbsp; In the event that any
signature is delivered by facsimile or electronic transmission, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or electronic signature page were an original thereof.</p>



<p class=MsoNormal>7.11&nbsp;&nbsp;&nbsp;&nbsp; <u>Severability.</u>&nbsp; If any provision of this
Agreement is held to be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement
shall not in any way be affected or impaired thereby and the parties will
attempt to agree upon a valid and enforceable provision that is a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.</p>



<p class=MsoNormal>7.12&nbsp;&nbsp;&nbsp;&nbsp; <u>Replacement of Shares</u>.&nbsp; If any certificate
or instrument evidencing any Shares is mutilated, lost, stolen, or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft, or destruction and customary
and reasonable indemnity, if requested.&nbsp; The applicants for a new certificate
or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Shares.&nbsp; If
a replacement certificate or instrument evidencing any Shares is requested due
to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.</p>



<p class=MsoNormal align=center style='text-align:center'>33</p>



<p class=MsoNormal>7.13&nbsp;&nbsp;&nbsp;&nbsp; <u>Remedies</u>.&nbsp; In addition to being entitled to
exercise all rights provided herein or granted by law, including recovery of
damages, each of the Investor and the Company will be entitled to specific
performance under the Transaction Documents.&nbsp; The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and hereby agree to
waive in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.</p>



<p class=MsoNormal align=center style='text-align:center'>34</p>















<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoNormal>IN WITNESS WHEREOF, the parties hereto have caused this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>COMPANY:</p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>GOOD TIMES RESTAURANTS INC.</p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>By: <i><u>/s/ Boyd E. Hoback</u></i></p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Name: Boyd E. Hoback</p>
  <p class=MsoNormal>Title: President and CEO</p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>INVESTOR:</p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>SMALL ISLAND INVESTMENTS LIMITED</p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>By: <a name="OLE_LINK3"><i><u>/s/ David Dobbin</u></i></a></p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Name: David Dobbin</p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Title: Chairman</p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>By: <i><u>/s/ Penelope Dobbin</u></i></p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Name: Penelope Dobbin</p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Title: President</p>
  </td>
 </tr>
</table>



<p class=MsoNormal align=center style='text-align:center'>35</p>



<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoNormal align=center style='text-align:center'><b>EXHIBIT A</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>Attached as
Exhibit 4.1</b></p>



<p class=MsoNormal align=center style='text-align:center'>A-1</p>



<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoNormal align=center style='text-align:center'><b>EXHIBIT B</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>SCHEDULE OF
EXCEPTIONS</b></p>



<p class=MsoNormal>Pursuant to the Securities Purchase Agreement, dated as of
October 29, 2010 (the <b>&quot;Purchase Agreement&quot;</b>), by and between Good Times
Restaurant Inc., a Nevada corporation (the <b>&quot;Company&quot;</b>), and Small Island
Investments Limited, a Bermuda corporation (the <b>&quot;Investor&quot;</b>), this
Schedule of Exceptions is being delivered by the Company to the Investor.&nbsp; All
defined terms herein have the same meanings assigned to them in the Purchase
Agreement, unless otherwise defined.</p>



<p class=MsoNormal>The representations and warranties of the Company set forth
in Section 3.1 of the Purchase Agreement are made and given subject to the
disclosures in this Schedule of Exceptions.&nbsp; The section numbers in this
Schedule of Exceptions correspond to the section numbers of the Purchase
Agreement requiring such disclosure.&nbsp; Any information disclosed herein under
any section number in Section 3.1 of the Purchase Agreement shall be deemed to
be disclosed and incorporated into any other section number under Section 3.1
of the Purchase Agreement where the applicability of such disclosure to such
other section number is reasonably apparent to the Investor based on the face
of such disclosure.</p>

<p class=MsoNormal><u>Section 3.1(d)</u>:&nbsp; The Company has change of control
provisions in its loan agreements with Wells Fargo Bank, N.A. and PFGI II LLC
under which the consummation of this transaction would constitute an event of
default if prior consent is not obtained. The loan agreements (the &quot;<b>Bridge
Loans</b>&quot;) with Golden Bridge LLC (<b>&quot;Golden Bridge&quot;</b>), W Capital, Inc. (<b>&quot;W
Capital&quot;</b>) and John T. MacDonald (<b>&quot;MacDonald&quot;</b>) also have change of
control provisions requiring prior consent if such Bridge Loans are not paid in
full as a part of the use of proceeds from this transaction.</p>



<p class=MsoNormal><u>Section 3.1(e)</u>:&nbsp; As discussed in Section 3.1(d) of
this Schedule of Exceptions, the Company intends to obtain consents from
certain lenders prior to the Closing.&nbsp; In addition, the Company intends to
obtain waivers from its Series B investors of their participation rights with
respect to this transaction and of their contractual board designation rights.</p>



<p class=MsoNormal><u>Section 3.1(g)</u>:&nbsp; Immediately prior to the Closing,
the authorized capital stock of the Company consists of (i) 50,000,000 shares
of Common Stock, par value $0.001 per share, of which 3,898,559 shares are
issued and outstanding, fully paid and non-assessable, and (ii) 5,000,000
shares of Preferred Stock, par value $0.01 per share, none of which are issued
and outstanding.&nbsp; As of immediately prior to the Closing, the Company has
reserved an aggregate of 552,072 shares of its Common Stock for issuance under
the Company's Omnibus Equity Plan (the <b>&quot;Plan&quot;</b>), of which options to
purchase 386,486 shares of Common Stock have been issued and the remaining
165,586 shares remain available under the Plan.&nbsp; In addition, the Company has
reserved an aggregate of 305,112 shares of its Common Stock for issuance upon
the exercise of outstanding warrants.</p>



<p class=MsoNormal>The Plan contains a change of control provision pursuant to
which, immediately upon the Closing, any and all stock options which have been
granted under the Plan shall be accelerated to become immediately exercisable
in full. &nbsp;No awards other than stock options have been granted under the Plan.</p>



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<p class=MsoNormal>In addition, the Company's Employment Agreement with Boyd
Hoback, its President and CEO, contains a change of control provision pursuant
to which, immediately prior to the Closing, all stock options granted to Mr.
Hoback shall be accelerated and shall become exercisable.&nbsp; In addition, if Mr.
Hoback's employment with the Company is terminated following a change of
control, he shall have a right exercisable within 15 business days after the
effective date of such termination to sell to the Company any or all of the
stock owned by him, including any shares acquired by exercise of accelerated
stock options or otherwise.&nbsp; If this right is exercised, the purchase price for
the shares shall be equal to the average daily market price of the Company's
stock on NASDAQ or any other applicable public trading market over the thirty
trading days immediately preceding the public announcement of termination of
Mr. Hoback's employment, and the purchase price shall be payable to Mr. Hoback
in cash within five business days after he provides the company with written
notification of his exercise of this right.&nbsp; The Company intends to obtain a
waiver from Mr. Hoback of any acceleration of his stock options and of his
right to sell his shares to the Company upon a change of control at the
Closing.</p>



<p class=MsoNormal>Attached hereto is a summary of the Company's outstanding
options and warrants.&nbsp; In addition, in connection with the Bridge Loans, the
Convertible Promissory Note held by W Capital and McDonald is convertible into
shares of Common Stock at any time prior to repayment at a conversion price of
25% less than the average price of the Common Stock during the 20 days prior to
the conversion date, provided however that the conversion price shall not be
below $0.75 per share nor above $1.08 per share.&nbsp; As set forth in Section 4.8
of the Agreement, the aggregate principal amount of the Bridge Loans will be
repaid out of the net proceeds from the sale of the Shares.&nbsp; The Company intends
to obtain consents from W Capital and McDonald to the conversion of the accrued
interest on their Bridge Loans into shares of Common Stock at a conversion
price of $0.50 per share.</p>



<p class=MsoNormal>The Company has granted Participation Rights to the holders
of the shares of Common Stock issued upon conversion of the Series B
Convertible Preferred Stock.&nbsp; The Series B investors will waive their right to
participation in connection with this transaction.</p>



<p class=MsoNormal><u>Section 3.1(j)</u>:&nbsp; None.</p>



<p class=MsoNormal><u>Section 3.1(k)</u>:&nbsp; None.</p>



<p class=MsoNormal><u>Section 3.1(l)</u>:&nbsp; As reported on the form 8-K filed on
January 23, 2009, the Company is in default of certain technical loan covenants
on our note payable to Wells Fargo Bank, N.A. (the &quot;<b>Bank</b>&quot;). On February
9, 2009 we received a Reservation of Rights letter from the Bank formally
notifying us of the default of the Earnings Before Interest Taxes and
Depreciation (&quot;<b>EBITDA</b>&quot;) Coverage Ratio of not less than 1.5 to 1.0 and
the Tangible Net Worth of not less than $5,000,000 as set forth in the Credit
Agreement for the period ending December 31, 2008. The letter serves as notice
that in light of the foregoing events of default, the Bank is reserving all of
its rights and remedies under the Credit Agreement and related agreements.</p>





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<p class=MsoNormal>The Bank is not accelerating the loan at this time and is
continuing to accept regularly scheduled payments of principal and interest
under the loan; however the acceptance of payments under the loan does not
constitute a modification of the Credit Agreement or a waiver of any of the
covenants or of the Bank's rights or remedies under the Credit Agreement,
including the right to accelerate the loan in the future after the giving of
notice.</p>



<p class=MsoNormal><u>Section 3.1(n)</u>:&nbsp; The Company has received a notice of
default under two of its leases due to the non-payment of real property taxes.&nbsp;
The Company is in negotiation with the landlord for the sublease of one of the
restaurants or termination of its lease in connection with the sale of the
restaurant.&nbsp; The Company is negotiation with the other landlord for the payment
of property taxes over time.&nbsp; The Company is and will remain liable for the
unpaid property taxes.</p>



<p class=MsoNormal>The Company has accrued 2009 real property taxes in the
aggregate amount of $196,740 related to ten of its properties.</p>



<p class=MsoNormal><u>Section 3.1(q)</u>: In February 2005, the Company issued
1,240,000 shares of Series B Convertible Preferred Stock, including 180,000
shares to The Erie County Investment Co., a substantial holder of the Company's
Common Stock and member of The Bailey Group.&nbsp; In June 2006, the Company
exercised its mandatory conversion rights under the terms of the Series B
Preferred Stock to convert all of those shares into a total of 1,240,000 shares
of Common Stock.&nbsp; Under the agreements for the Series B Preferred Stock
financing, The Bailey Group currently has the right to elect three directors,
provided that two directors meet the Nasdaq independence standards.&nbsp;
Furthermore, the other investors in the Series B Preferred Stock financing
currently have the right to elect three directors.&nbsp; The number of director positions
subject to these provisions will decrease proportionally to the extent that the
original investors sell or otherwise transfer the Common Stock into which the
Series B shares have been converted.&nbsp; An additional provision of the Series B
Preferred Stock financing restricts, for as long as the original investors hold
at least two-thirds of the Common Stock into which the Series B shares have
been converted, they have participation rights on any subsequent equity
financings and our ability to increase the size of the Board of Directors above
seven directors unless we the Company first receives approval from the holders
of at least three-fourths of all outstanding shares of Common Stock.&nbsp; Geoffrey
R. Bailey, Richard J. Stark and Alan A. Teran are the current directors
designated by The Bailey Group, and Ron Goodson, David Grissen and Eric W.
Reinhard are the current directors designated by the other investors.&nbsp; Geoffrey
R. Bailey is a director of The Erie County Investment Co., which owns 99% of
The Bailey Company.&nbsp; The Bailey Company and The Erie County Investment Co. are
principal stockholders of us.&nbsp; Geoffrey R. Bailey's father, Paul T. Bailey, is
the principal owner of The Erie County Investment Co.</p>



<p class=MsoNormal>The Company's corporate headquarters are located in a building
owned by The Bailey Company and in which The Bailey Company also has its
corporate headquarters.&nbsp; The Company currently leases its executive office
space of approximately 3,693 square feet from The Bailey Company for
approximately $55,000 per year. &nbsp;The lease expired September 30, 2009 and the
Company continues to lease the space on a month to month basis.</p>





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<p class=MsoNormal>The Bailey Company is also the owner of one franchised Good
Times Drive Thru restaurant which is located in Loveland, Colorado and was the
owner of one franchised restaurant in Thornton, Colorado which was closed in
October 2009. The Bailey Company has entered into two franchise and management
agreements with the Company.&nbsp; Franchise royalties and management fees paid
under those agreements totaled approximately $78,000 and $94,000 for the fiscal
years ending September 30, 2009 and 2008, respectively.</p>



<p class=MsoNormal>In April 2009 the Company and the Subsidiary entered into a
loan agreement with Golden Bridge pursuant to which Golden Bridge made a loan
of $185,000 to the Subsidiary to be used for restaurant marketing and other
working capital needs.&nbsp; The Golden Bridge loan is evidenced by a promissory
note dated April 20, 2009 made by the Company and the Subsidiary, as co-makers,
which bears interest at a rate of 10% per annum on the unpaid principal balance
and provides for monthly interest payments with all unpaid principal due on
July 20, 2010.&nbsp; The note has been extended to December 31, 2010.&nbsp; In connection
with the loan, the Company issued to Golden Bridge a three-year warrant dated
April 20, 2009 which provides that Golden Bridge may at any time from April 20,
2009 until April 20, 2012 purchase up to 92,500 shares of the Company's common
stock at an exercise price of $1.15 per share.</p>



<p class=MsoNormal>Eric Reinhard, Ron Goodson, David Grissen, Richard Stark,
and Alan Teran, who are all members of the Board and stockholders of the
Company, are the sole members of Golden Bridge.&nbsp; Eric Reinhard is the sole
manager of Golden Bridge.&nbsp; The Company's obtaining of the loan from Golden Bridge
and related transactions were duly approved in advance by the Board by the
affirmative vote of members thereof who did not have an interest in the
transaction.&nbsp;&nbsp; Total interest and commitment fees paid under this agreement
were approximately $12,000 for fiscal 2009. The amount due to related parties
under this agreement that is included in notes payable was $185,000 at
September 30, 2009.&nbsp; The fair value of the Warrant issued was determined to be
$42,000 with the following assumptions: 1) risk free interest rate of 1.27%, 2)
an expected life of 3 years, and 3) an expected dividend yield of zero. The
fair value of $42,000 was charged to the note discount and credited to
Additional Paid in Capital. The note discount is being amortized over fourteen
months and charged to interest expense.</p>



<p class=MsoNormal>On February 1, 2010, the Company and the Subsidiary entered
into a loan agreement with Golden Bridge, W Capital and McDonald, pursuant to
which the lenders made loans totaling $400,000, to be used for restaurant
marketing and other working capital uses of the Subsidiary.&nbsp; These loans are
evidenced by a convertible secured promissory note dated February 1, 2010 made
by the Company and the Subsidiary, as co-makers, which bears interest on the
unpaid principal balance at a rate of 12% per annum through August 1, 2010 and
at rate of 14% per annum from August 1, 2010 through December 31, 2010.&nbsp; All
interest accrues through December 31, 2010.&nbsp; The note is convertible into
shares of Common Stock at any time prior to prepayment at a conversion price of
25% less than the average price of the Common Stock during the 20 days prior to
the conversion date, provided however that the conversion price shall not be
below $0.75 per share nor above $1.08 per share.</p>



<p class=MsoNormal>In connection with these loans, the Company issued to Golden
Bridge, W Capital and McDonald two-year warrants dated February 1, 2010 which
provide that the lenders may purchase up to an aggregate of 50,000 shares of
Common Stock at an exercise price equal to the conversion price under the
note.&nbsp; The warrants expire two years from the date of repayment or conversion
of the loan.</p>





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<p class=MsoNormal>On April 1, 2010, the Company, the Subsidiary and the
lenders amended the loan agreement to replace Golden Bridge as a lender with an
additional loan from W Capital and McDonald on the same terms and conditions
that applied to Golden Bridge.&nbsp; The Company repaid the principal amount which
was owed to Golden Bridge. The warrant which had previously been issued to
Golden Bridge was cancelled in its entirety.</p>



<p class=MsoNormal><u>Section 3.1(s)</u>:&nbsp; The Company's Closing Fees include
(i) $150,000 payable to Mastodon Ventures, Inc., inclusive of all accrued
expenses, in connection with strategic advisory services, and (ii) $25,000
payable to Woodville Hall Capital, LLC in connection with the preparation and
deliver of a fairness opinion to the Company.</p>



<p class=MsoNormal><u>Section 3.1(t)</u>: The Company has granted registration
rights to W Capital and McDonald in connection with the shares of Common Stock
issuable upon conversion of their convertible promissory note and upon exercise
of their warrants.</p>



<p class=MsoNormal><u>Section 3.1(u)</u>:&nbsp; The Company has received notices of
non-compliance from Nasdaq for non-compliance with its continued listing
requirements for the Nasdaq Capital Markets for a) not maintaining a $1 minimum
bid price on its common stock and b) falling below the $2.5 million minimum
stockholders' equity requirement.&nbsp; The Company has until January 2011 to regain
compliance with the $1 minimum bid price and is filing a Compliance Plan with
Nasdaq on October 4, 2010 to meet the $2.5 million minimum stockholders' equity
requirement after giving effect to the transaction contemplated herein.</p>



<p class=MsoNormal><u>Section 4.5</u>:&nbsp; The Good Times Drive Thru location at
Federal and Asbury (Store #130) has been closed and is under negotiation for
lease termination.&nbsp; The Company took a write down of the assets associated with
the closure of the restaurant of $36,247 and accrued a lease liability of
$34,802 in June 2010.&nbsp; The site is under final negotiations for the termination
of the lease in connection with the sale of the property underlying the lease
to Jack in the Box.&nbsp;&nbsp; If the sale is delayed or if Jack in the Box terminates
the purchase contract, the Company will remain liable on the lease from August
1, 2010 through January 31, 2011.</p>



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<div class=WordSection2>









<p class=MsoNormal>Capitalization Summary as of 9/30/2010</p>

<p class=MsoNormal>Good Times Restaurants Inc.</p>

<p class=MsoNormal>Total Common Shares Outstanding as of 9/30/2010&nbsp; 3,898,559</p>

<p class=MsoNormal><b>Summary of outstanding Warrants</b>:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=895
 style='width:671.4pt;border-collapse:collapse'>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:solid windowtext 1.0pt;
  border-right:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>Entity</b></p>
  </td>
  <td width=156 valign=top style='width:117.0pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>Total Warrant Shares</b></p>
  </td>
  <td width=78 valign=top style='width:58.5pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>Expiration</b></p>
  </td>
  <td width=108 valign=top style='width:81.0pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>Exercise Price</b></p>
  </td>
  <td width=312 valign=top style='width:3.25in;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>Notes</b></p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Golden Bridge, LLC</p>
  <p class=MsoNormal>W. Capital &amp; John T.
  McDonald-2/1/10</p>
  </td>
  <td width=156 valign=top style='width:117.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>92,500</p>
  <p class=MsoNormal>50,000</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>04/20/12</p>
  <p class=MsoNormal>12/31/12</p>
  </td>
  <td width=108 valign=top style='width:81.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.15</p>
  <p class=MsoNormal>Not below $.75</p>
  <p class=MsoNormal>Nor above $1.08</p>
  </td>
  <td width=312 valign=top style='width:3.25in;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  <p class=MsoNormal>25% less than the average
  price of the Company's common stock during the 20 days prior to the exercise
  date, provided however that the exercise price shall not be below $.75 per share
  nor above $1.08 per share</p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=108 valign=top style='width:81.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=312 valign=top style='width:3.25in;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>W. Capital &amp; John T.
  McDonald-8/1/10</p>
  </td>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>50,000</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12/31/12</p>
  </td>
  <td width=108 valign=top style='width:81.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Not below $.75</p>
  <p class=MsoNormal>Nor above $1.08</p>
  </td>
  <td width=312 valign=top style='width:3.25in;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>25% less than the average
  price of the Company's common stock during the 20 days prior to the exercise
  date, provided however that the exercise price shall not be below $.75 per
  share nor above $1.08 per share</p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=108 valign=top style='width:81.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=312 valign=top style='width:3.25in;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>PFGI II, LLC</p>
  </td>
  <td width=156 valign=top style='width:117.0pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>112,612</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>01/02/13</p>
  </td>
  <td width=108 valign=top style='width:81.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.11</p>
  </td>
  <td width=312 valign=top style='width:3.25in;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;border-right:
  none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Total outstanding warrants</p>
  </td>
  <td width=156 valign=top style='width:117.0pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>305,112</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=108 valign=top style='width:81.0pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=312 valign=top style='width:3.25in;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
</table>

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoNormal><b>Summary of outstanding Stock Options:</b></p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=895
 style='width:671.4pt;border-collapse:collapse'>
 <tr>
  <td width=199 style='width:149.4pt;border:solid windowtext 1.0pt;border-right:
  none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Grant Date &amp; Type</p>
  </td>
  <td width=126 style='width:94.5pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Total Outstanding Options</p>
  </td>
  <td width=120 style='width:90.25pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Boyd Hoback's Options</p>
  </td>
  <td width=204 style='width:152.75pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Expiration</p>
  </td>
  <td width=246 style='width:184.5pt;border:solid windowtext 1.0pt;border-left:
  none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Exercise Price</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2000 ISO - Expired</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>0</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>0</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/10</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.38</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2001 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>57,400</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>50,000</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/11</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.75</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2002 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11,770</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>3,750</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/12</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$2.70</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2003 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>19,550</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>3,900</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/13</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$3.60</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2003 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>6,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/13</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$3.60</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2004 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>33,560</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12,000</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/14</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$3.11</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2004 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>6,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/14</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$3.11</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>2/11/2005 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>4,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>02/11/15</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$3.33</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2005 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>39,750</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>8,500</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/15</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$5.68</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2005 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/15</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$5.68</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/17/2006 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>46,650</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>19,000</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/17/16</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$6.38</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/17/2006 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/17/16</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$6.38</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/5/2007 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>4,800</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/05/17</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$5.75</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/2/2007 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/05/17</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$5.75</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/14/2008 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>68,400</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>28,503</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/14/18</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.47</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/14/2008 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/14/18</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.47</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/6/2009 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>30,606</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>13,652</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/06/19</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.15</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/6/2009 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/06/19</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.15</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
  outstanding options</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>386,486</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>139,305</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=895 colspan=5 valign=top style='width:671.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Note: There are a total of
  fifteen current employees in the plan, no former employees hold any options.</p>
  </td>
 </tr>
</table>





<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



</div>

<br
clear=all style='page-break-before:always'>


<div class=WordSection3>









<p class=MsoNormal align=center style='text-align:center'><b>EXHIBIT C</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CLOSING
CAPITALIZATION TABLE</b></p>

<p class=MsoNormal><b>&nbsp;</b></p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=625
 style='border-collapse:collapse'>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Small Island Investment</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>2,100,000&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Price/Share ($)</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.50&nbsp;</u></p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Common Shares Issued</p>
  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>4,200,000&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Bridge Loans:</p>
  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>300,000&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>w/J-Mac</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>100,000&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>w/J-Mac</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal><u>&nbsp; 185,000&nbsp;</u></p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Golden Bridge</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Total Bridge Lender Debt</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>585,000&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Less: Paydown</p>
  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal><u>($585,000)</u></p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Outstanding balance to be converted to equity</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>-&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Conversion Price</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.50&nbsp;</u></p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Common Shares Issued</p>
  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>0&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Accrued Interest to be converted to equity</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>36,647&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>As of November 23, 2010</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Conversion Price</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.50&nbsp;</u></p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Common Shares Issued</p>
  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>73,293&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
</table>





<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>Capitalization</u></p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>Current</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>At Closing</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Small Island</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>-</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>0.00%</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>4,200,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>51.40%</p>
  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Bailey/Reinhard</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>2,079,192</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>53.33%</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>2,079,192</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>25.44%</p>
  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Other SH'rs</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>1,819,367</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>46.67%</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>1,819,367</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>22.26%</p>
  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Converted Interest w/J-Mac</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp; 0.00%</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 73,293</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp; 0.90%</u></p>
  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>3,898,559</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>100.00%</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>8,171,852</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>100.00%</p>
  </td>
 </tr>
</table>



<p class=MsoNormal align=center style='text-align:center'>C-1</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

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<DOCUMENT>
<TYPE>EX-2
<SEQUENCE>3
<FILENAME>fairnessopinion11.htm
<TEXT>
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<p class=MsoNormal align=center style='margin-left:4.0in;text-align:center;
text-indent:.5in'>October 29<sup>th</sup>, 2010</p>





<p class=MsoNormal>Board of Directors</p>

<p class=MsoNormal>Good Times Restaurants, Inc.</p>

<p class=MsoNormal>601 Corporate Circle</p>

<p class=MsoNormal>Golden, CO&nbsp; 80401</p>



<p class=MsoNormal>Gentlemen: </p>



<p class=MsoNormal style='text-indent:.5in;line-height:200%'>Good Times
Restaurants, Inc. (the &quot;Company&quot;) proposes to issue 4.2 million of its common
shares to Small Island Investments, Ltd. (&quot;Investor&quot;) for a total consideration
of $2.1 million (the &quot;Proposed Purchase Price&quot;).&nbsp; The proposal, in
its present form, is set forth in a Securities Purchase Agreement dated October
29<sup>th</sup>, 2010.&nbsp; You have requested our opinion as to whether the
Proposed Purchase Price is fair, from a financial point of view, to the
Company. </p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>Woodville Hall is
engaged in the valuation of businesses in connection with securities issuances,
mergers, acquisitions and divestitures.</p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>In connection with
your request, we have:</p>

<p class=MsoNormal style='line-height:200%'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed certain reports
and information filed by the Company with the Securities and </p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>Exchange
Commission;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
the Company's Management Presentation, dated Spring, 2010;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Discussed
the business and prospects of the Company with senior operating and financial
officers as well as directors of the Company; </p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Discussed
the offering process with the Robert Hersch of Mastodon Ventures, Inc., an
advisor to the Company;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
the term sheet, dated October 1<sup>st</sup>, 2010 between the Company and
Investor; </p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
the Securities Purchase Agreement (and related agreements) dated October 29<sup>th</sup>,
2010 between the Company and Investor;</p>



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<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
management prepared company store performance financials for the past two
years;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
draft consolidated financial results for the quarter ending September 30<sup>th</sup>,
2010 and certain public filings containing prior quarterly results;</p>

<p class=MsoNormal style='line-height:200%'>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed a NASDAQ
de-listing extension letter dated October 6, 2010;</p>

<p class=MsoNormal style='line-height:200%'>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed certain debt
agreements;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
the Company's stock performance for the prior three months (price, volume,
percentage of outstanding shares) vs. selected other companies;</p>

<p class=MsoNormal style='line-height:200%'>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed insider share
holdings;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
the investment banking process for the prior year, including the number of parties
contacted, term sheets and letters of intent received, and reasons that the
prior potential transactions did not close;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
minutes of the September 30, 2010 Board meeting where the proposed common stock
investment by the Investor was discussed;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
signed Special Committee and Board of Directors resolutions authorizing the
Investor's investment; and</p>

<p class=MsoNormal style='line-height:200%'>16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed certain other
publicly available information on the Company.</p>





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<p class=MsoNormal style='text-indent:.5in;line-height:200%'>We have relied
with your approval, and without independent verification, on the accuracy,
completeness, and fair representation of all the financial and other
information obtained by us from public sources and provided to us by the
Company and Mastodon Ventures, Inc., and this opinion is conditioned upon such
accuracy, completeness and fairness. We have assumed that the unaudited
financial results provided to us by the Company's management represent its best
estimates of the most probable results for the Company for the periods
presented therein.&nbsp; </p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>Finally, we note
that our opinion is necessarily based upon market conditions as they exist and
can be evaluated as of the date of this letter.</p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>Based upon and
subject to the foregoing, we advise you that, in our opinion and from a
financial point of view, the Proposed Purchase Price is fair to the Company.&nbsp;
We have not examined any other aspect of the proposed transaction and express
no opinion on any other aspect of the proposed transaction.</p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>This opinion is
for your use only and may not be used or relied upon by or published for or
communicated to any third party for any purpose without our prior written
consent.</p>

<p class=MsoNormal style='text-align:justify'>Very truly yours,</p>



<p class=MsoNormal style='text-align:justify'><i><u>/s/ Jonathan F. Catherwood</u></i></p>

<p class=MsoFooter>Woodville Hall Capital, LLC</p>

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